Closing Markets: Corn: +0.75 old & +1.25 new.
Beans: -2.75 old & -0.25 new. Wheat: +5.50.
Good evening!
Market Recap-
Thursday trade was mixed across the CBOT, with the grain markets finishing the day in the green and the soy complex finishing in the red on what was a reversal day led by the outside markets. There is no relationship between the ags and the metals from a price standpoint, but a sharp reversal off the highs in gold and silver also produced a sharp reversal in the soy complex, with overall money flow throughout the commodity space seeming to be in sync.
Corn Summary-
Corn futures closed quietly higher on Thursday after chopping around throughout most of the session, as steady export data and a rally in crude oil prices weren't enough to spark more sustained buying during the day. Along with the E15 headlines, prices have also seen strength this week on ideas that hot/dry weather in Argentina could be nipping the top end of the crop, though relief is still expected into next week. However, the loss of a million or two million tons isn't enough to alter what is still a plentiful world supply situation, and this is why we've struggled to become more bullish flat price. Exports and demand in general have been great, but its long been true that a bigger picture price rally must be a product of a supply disruption, not a new development in demand, and we don't see this changing any time in the near future.
Soybean Summary-
Soybean futures saw two-sided trade on Thursday, with an overnight rally rolling over and working backwards shortly after the morning session re-open. Like we mentioned above, it’s hard to ignore the similarities in the five-minute charts between the bean market and the gold/silver markets despite there being no correlation between the two otherwise. For whatever reason, the sharp reversal in the metals space spilled over into the soybeans also, and combined with a rejection of the 100-day moving average, allowed prices to work lower into the noon hour. The product markets were also lower on Thursday, though oil again saw a fairly wide-ranging day.
Wheat Summary-
Wheat futures closed higher with the corn market on Thursday, as short covering and technical buying continue to drive values to some of their highest levels since before the Thanksgiving holiday. Though it doesn't give much insight into price direction, the set-up in wheat is simple; there is an ongoing debate between ample global supplies and positive chart patterns, with the latter seemingly being in the driver's seat today. Like we talked about this morning, the more US wheat rallies while the rest of the world doesn't, the further out of line prices will get as it pertains to export potential.
Outside News Headlines-
Crude oil futures up $2.20+/bbl.
Weather Updates-
Models are beginning to hone in on an area of the Carolina's where 5-8" of snowfall will be possible out of this weekend's storm system, and are in better agreement again this afternoon than they were yesterday. Otherwise, still little of note for the broader Midwest, as weekend weather looks to stay cold and calm for the most part.
The CPC's week two forecast trended to a more average precip outlook in the period for the midsection of the country this afternoon, with more regular moisture chances expected to emerge beyond the first week of February. Still nothing new on the temperature side, with models still showing a warm west/cool east over the next 15 days, though the warmer is slowly creeping further to the east by the end of the period.
Concern will linger across most of Argentina for another few days until temperatures cool a bit this weekend, but precip isn't expected to return still until the later part of next week. Amid what was previously good soil moisture, we are unsure today exactly what yield damage potential is, but would note that it obviously grows should next week's moisture not verify.
There continues to be little if anything to discuss in terms of the forecast for Brazil, as rainfall will remain present all of the country's growing regions over the next week to 10 days. It remains a mix between harvest delays in some places and boosts in soil moisture for the second corn crop across others.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
