Closing Markets: Corn: +5.50 old & +3.75 new.
Beans: +20 old & +11 new. Wheat: +8.50.
Good evening!
Market Recap-
Thursday ag trade was actively higher for the second straight day, with the soy complex again pacing what was another high volume session heading into the end of the week and weekend on further China-related buying. The grain markets were also able to come along for the ride a bit more on Thursday, but we note for the beans that today's rally stopped in the exact same spot as it did yesterday, which could be setting the table for a Friday pullback going into the weekend.
Corn Summary-
Spot corn futures closed at their highest level in nearly a month on Thursday, as spill-over buying from the beans and speculative inflows based on friendly charts lifted values throughout the session. Momentum is clearly higher with the market still being in an uptrend from the days following the January WASDE report, we just continue to be unsure of why or for how long it’s going to last. Should there not be a weather issue with Brazil's safrinha crop, Argentine production stabilizes somewhere around 60 MMTs, and the US plants 93-95 million acres this spring, we would see little reason for corn futures to trade outside of the 4-4.50 range they've been in for some time now and are right back smack in the middle of today.
Soybean Summary-
Soybean futures spent most of the morning working back towards the highs made on Wednesday, but for the most part, were unable to break through them and stopped almost exactly where they did the day prior. The buying, and massive upticks in volume and open interest, are almost entirely tied to President Trump's comments on additional Chinese bean purchases which continue to make little to no economic sense and have not been confirmed by anyone on the side doing the buying. We would mention that China also offered no confirmation of the 12 MMTs of purchases before going ahead and making good on them a few months ago, which makes the odds they do the same this time around a true unknown. Like we said yesterday though, we will continue to reiterate the fact that even at 20 MMTs of total purchases this year, this is still the third lowest total for any marketing year in the last 20 seasons.
Wheat Summary-
Wheat futures found some renewed upside momentum on Thursday for really the first day this week, with prices being lifted by short covering amid rallies in the other ag markets. Said one newswire this afternoon, "the attitude by the funds seemed to be 'if we can get a government surprise in the soybeans that rallies prices 50 cents in a day, what am I doing short wheat?'" We see this as fitting, and likely had some semblance of accuracy as to why the market saw the strength it did today. Otherwise, its steady as she goes on the global front, with Black Sea prices little changed from recent weeks and concern surrounding winter kill in the region continuing to decline.
Outside News Headlines-
Crude oil futures down $1.50+/bbl.
Weather Updates-
Weather models continue to see mostly calm conditions now through the Midwest over the weekend and into next week, with precip seen mostly limited to scattered snow flurries across the upper Midwest and northwest. There will be some areas that see 1-2" of accumulation over the weekend, but these will mostly be in the northeast and up into Canada.
There continues to be good model agreement then into mid-month, as forecasts show high pressure riding working east that should allow warmer temps to linger through the mid-section of the US for the next 10 days or so. Precip chances improve beyond the middle of next week, with models today showing several rounds of storms possible for the central US beginning next Tuesday/Wednesday and lasting into the following week.
The mid-day GFS run today was wetter than the overnight version and is more like the EU model now in continuing to see better rains across Argentina over the next two weeks. Temperatures are also still seen moderating, which should help benefit crops.
As has been the case all week, there continues to be nothing new on the weather outlook for Brazil; models are still showing regular monsoonal rains continuing to fall across the north and central regions, while the south stays drier. Models are marginally wetter through the south today, but still drier in comparison to areas further north.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
