Morning Comments January 20, 2017
Friday, January 20, 2017, 2:01 PM
Submitted by: Landus Cooperative
It feels like our commodity space is taking a breather after a week that won’t be easy to forget. Soybeans are up almost 22c on the week (after a 56c jump last week) and are currently trading 7c lower at the 7:45 a.m. break. As in any significant rally, it is important to pay attention to the “structure” of the market – we will get a good look at this in today’s Commitment of Traders report. It will be important in determining how much of this rally was supported by fund short covering and other managed programs. Fundamental news is a bit sparse so far this Friday morning. It looks like the pressured areas in Argentina will get a much-needed break from the deluge of rainfall in the last 2 weeks.
Corn futures are holding steady this morning and seem to be the only of our three major commodities to escape a set back after the recent rally. Both wheat and soybeans have run into some decent resistance. Soybeans traded through the high made back in November before falling back and wheat nearly touched the 150 day moving average before dropping for three straight days. March corn futures have closed at or above the 3.65 level the last three days. One indicator to closely watch is the corn:soybean ratio. The new crop ratio is currently sitting at 2.60, which would “historically” favor soybeans. As the acreage battle plays out in the next 60-90 days, it is important to strongly consider executing forward sales when making acreage commitments.
Outside markets are mixed with crude oil up almost a dollar a barrel (2%) and the dollar marginally firmer this morning.
Corn – mixed to steady
Beans – 5 to 7 cents lower
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