Mid-day Comments January 26. 2017
Thursday, January 26, 2017, 7:01 PM
Submitted by: Landus Cooperative
Currently our markets are weaker with beans leading the charge lower. We did see strong export sales numbers this morning in corn which gave our markets support early on – only to once again fail and leak lower. With a firmer dollar today (it looks like the U.S. dollar index is putting in a key reversal on the charts) and good looking weather in South America, any rallies could be limited. It is worth noting that over the last few days we have seen heaving buying right on the close, it will be interesting to see if we see that again as it could allow us to close in the black. Big picture though? I see nothing that would cause us to break out of our recent ranges…
Of course, we do know we will eventually break out of the recent ranges (we have to, right?) – trying to predict which side (top or bottom) is of course difficult. From the fundamental (S&D) side of the equation – the crops in South America look big and are no longer shrinking which should cause you to lean a little bearish (negative) to prices for now. Also, while we have seen U.S. corn export demand improve lately, that demand could be short lived with another harvest just weeks away. I should mention that with a large South American bean harvest on deck, U.S. export corn demand could hang around longer than expected thanks in part to the ports in South America staying busy loading bean boats.
On the flip side – if this good-looking South American crop doesn’t pressure the market here in the next few weeks, the window for prices to drop out the bottom of the range could start to close as conversations turn to U.S. acres and U.S. crop potential. That time of year always seems to fire the bulls up because if you spin it right - both dry and wet spring weather can be friendly to prices! (disclosure: the bears can do the same thing, they just usually end up having to wait later into the season before anyone listens to them)
Corn is 3 to 4 cents lower
Soybeans are 2 to 5 cents lower
Have a great day!
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