Morning Comments March 16, 2017
Thursday, March 16, 2017, 8:03 AM
Submitted by: Landus Cooperative
Corn 2c higher
Soybeans 5c to 7c higher
Grains are higher this morning on technical strength (oversold territory) and a slight increase in user pricing and exports. There are some concerned about the cold temps in parts of the corn belt this week, especially in the southern regions where the corn is in the ground and wheat is emerging . Open interest saw a consistent increase in our staple commodities, pointing to continued money flow into our markets.
The FOMC meeting yesterday produced a decision to hike interest rates ¼%, which (counterintuitively) led our dollar to be sharply lower yesterday (positive to grains). Typically, higher interest rates would raise the value of the dollar (i.e. higher demand for U.S. dollars). However, the increase yesterday was smaller than many aggressive traders expected. Additionally, raising interest rates is typically seen as a detriment to stock market performance (and consequently, detrimental to the value of the dollar). There are lots of moving pieces here to keep our thumbs on…
South American weather is still friendly and it looks as though no major hiccups will change the “record crop” narrative. Export sales were strong this morning for corn and wheat. There were also a couple of wheat and soybean “flash sales” reported this morning (any export sales greater than 100 KMT must be reported to the USDA). Now that rail car values have collapsed from multi-month highs, grain from the interior U.S. can more easily find its way to export terminals.
Have a good day!