AM Comments 10/19/16
Wednesday, October 19, 2016, 12:10 PM
Submitted by: Dustin Weiner
It has been a choppy overnight session with corn and wheat trading in the red while soybeans are trying to hold onto minimal gains, trading near steady. As the wet weather moves out of the corn belt, soybean harvest is starting to pick back up and the cash markets are definitely feeling it. Yesterday the basis at the US Gulf got smashed as the farmer begins to unload soybean ownership. With stories from all corners of the belt about soybean piles, bags, and elevators that are forcing sales (going cash only) it is getting more obvious by the day that this record crop is struggling to find a home. The corn market doesn’t feel that way (yet). As we are seeing in beans, we may have to wait and see where that last chunk of the corn crop goes (and what the farmer does with his/her ownership) to truly get a feel for cash corn values at the end of the fall season.
Down in South America they are plugging along nicely with soybean planting. It looks like Brazil has 17% of their beans in the ground, ahead of last year (11%) and ahead of the average (12%). This good start to bean planting does have a few traders talking about an early harvest (which means a potential early end to our export season) but it seems a little too early to predict that. Also FYI – Brazil’s “1st crop” corn plantings (yes, they double crop corn) are just over 50% done which is right on average.
Overall – it appears like our markets could remain range bound for now. Yes, it has been nice to see corn breakout to the top side of its 3+ month range (aided by fund short covering) – but with half the crop still in the field, we need to be careful. Unless there is a major surprise in yield, corn could continue to chop around and maybe even drift lower if yields hold close to expectations. As for beans, well… the cash markets today are telling us that this uptick in futures price has done its job as the farmers are selling into it. After harvest is put to bed – we will be watching South America for signs that the funds could add to their long soybean positions.
Corn is 2 to 3 cents lower
Soybeans are steady/mixed
Have a great day!
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