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MARKET COMMENTARY

Weekly Market Summary May 25, 2018

Friday, May 25, 2018, 2:05 PM
Submitted by: Landus Cooperative


Good afternoon –

Green fonts showing on our quote screens today as we close out the trade week in the ag sphere. On the week, corn closed up 4c, soybeans gained 43.5c and wheat closed 27.5c higher. There’s lots of news swirling around out there – it’s tough to lay blame or give credit to any one or two inputs. Weather is certainly in the mix. Feedback from the country suggests most corn planting in Iowa should be wrapped up in the next 3-4 days and we’ve made great progress on soybean seeding. Weather in Iowa turns warmer for the next week. Some areas are borderline over-saturated, but continued/consistent rain events won’t be turned away. The “too much rain for planting” narrative seems to have run its course. Now we turn our attention to emergence, June rains, growing degree days, and tasseling. Also worth noting is expanding dryness in the Black Sea region, giving support to wheat (and by proxy, corn).

We can’t ignore the volatile international conversations evolving day-to-day. Chinese and U.S. trade talks have yielded lots of rhetoric, but very little solid footing. A three day weekend may be just what the doctor ordered after the whiplash we’ve been run through this week. Currently, relations feel stronger than they did last Friday with the administration touting progress being made on behalf of the ag sector. Until the market has any solid ground to stand on, we will be at the mercy of announcements and perception. If barriers for trade into China are removed or eased, that would most certainly place more pressure on American farmers to meet the needs of Chinese consumers. Right now, that pressure would be more than welcomed. At this point, all we can do is wait and see.

All-in-all, this week felt like a transition from spring to summer as most areas are done planting corn and soybean progress is healthy. We turn our attention, once again, to the forward curve and the uncertainties of weather and crop production risk. These are the scenarios that fund managers and spec money seek – volatility and risk present opportunity. Barring any surprises, today’s COT report from the CFTC should show growth in fund length for the commodity sector.

Have a great weekend!

 

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