Morning Comments December 20, 2018
Thursday, December 20, 2018, 2:12 PM
Submitted by: Landus Cooperative
Corn Steady to 1 higher
Beans 2 to 3 higher
Traders continue to expect that USDA will lower their yield estimate in the January WASDE report and rumors of Chinese buying persist. Because if this traders don’t appear to have a great appetite for getting aggressive on selling the corn market. Yesterday’s EIA ethanol production report showed that production came in unchanged from the previous week at 308 million gallons, which was once again well below the USDA’s demand estimate “needed” pace. Today we will see the release of the USDA’s weekly export sales report. The trade expects sales in the range of 1.0 to 1.5 mmt on the corn side. March corn futures have traded in a very narrow range since the beginning of December. At some point, we’ll break out of this range. Most likely the Jan 11th WASDE report will provide a reason.
Yesterday afternoon, the Federal Reserve raised interest rates by a quarter of a percent, which many investors had anticipated. Even so, the move sparked some anxiety over a potential recession, with the Dow dumping another 350 points Wednesday to reach 23,323. Futures trading was slightly higher overnight, but stocks still stand on shaky ground for now.
Today will see the release of the USDA’s weekly soybean export sales report at 7:30. The sales report will include last week’s Chinese sales and should result in the largest weekly sales number of the year. The agency is expected to report between 77.2 million and 99.2 million bushels in sales for week ending December 13. Yesterday’s confirmation of more sales to China, to the tune of 1.2 MMT was not what the trade was anticipating, as most expected a number between 1.5 and 2.0 MMT.
The March dollar index is trading lower this morning. February crude oil contract is trading sharply lower.