Closing Markets: Corn: +2.25 old & +2 new.
Beans: +3.75 old & -0.25 new. Wheat: +2.
Good evening!
Market Recap-
Corn and soybean markets closed higher on Wednesday, but were off their highs by the end of the day as the dead-cat-bounce seen throughout the morning hours faded into the close. It was a stronger day today in terms of volume and like we mentioned earlier in the week, we don't anticipate Monday's report taking prices to zero; but, at the same time, the unexpected overhang of supply is going to be a dark cloud on the market until something new comes up to break it apart, and we have little insight today as to if/when this occurs.
Corn Summary-
Corn futures were able to stop the bleeding a bit on Wednesday but could muster little else as prices closed just a penny or two higher after shedding some 25+ cents the last two days previously. Like we mentioned above, we don't see a lot of reason for values to go down and test the $4 level from a fundamental standpoint based on demand, but we also can't come up with a lot of things to point to for why buyers would come back into the space either. A seventeen billion bu pile of corn is downright massive, and unless weather turns worse in Brazil and Argentina, the two of them also look like they're going to have big crops to go on top of this. There's just an abundance of corn around the world, and even with good demand, this is going to remain the limiting factor in terms of price rallies.
Soybean Summary-
Like the corn market, soybean futures traded higher on Wednesday but saw little more than a corrective bounce throughout the session as buyers continued to be mostly limited and as news remained largely absent. Like we've talked about for months now, the bottom line as it pertains to soybean pricing is the fact the Brazil is about to harvest their biggest crop ever and that Chinese buyers likely won't continue making political purchases from the US at prices that simply don't make sense economically. Traders will continue to hold onto hope that domestic biofuel policy gets approved, but in the meantime, we just don't a lot there that's going to bring about a quick rally in values in the short term.
Wheat Summary-
Wheat futures saw a quiet day of trade on Wednesday, with limited news and small trading ranges as there appeared to be little interest in the market throughout the day. Until/unless something comes about that would alter current production prospects in the US over the next few months, we find it likely that prices continue to trade sideways/lower, with any move in corn likely also providing impact to pricing in wheat.
Outside News Headlines-
Crude oil futures down $1.00+/bbl.
Weather Updates-
Midwest weather into the end of the week and weekend will continue to feature variable moisture across the central and northern parts of the area and into the northeast, while the southeast will see rains/storms today/tomorrow and into the end of the week. Temperatures will trend cooler into the end of the week and weekend for the east, while the west likely stays warmer.
Extended forecasts today are like prior runs, and continue to show wetter than normal conditions in the week of Jan 22-28, while temperatures trend cooler across the northern and northeastern US, while the south/southwest stay warmer.
Midday weather forecasts are slightly wetter into the first part of next week through Brazil's growing regions in the southwest, but are otherwise little changed overall and continue to offer little in the way of concerns as harvest gets rolling in another couple weeks. Any signs of heat remain absent for the most part.
Similarly for Argentina, not a lot new again this afternoon as better rains are expected to start filling back in the next couple days and into the end of the week, but the bulk of the moisture looks to stay to the north and the west of the main growing regions into the weekend and first part of next week. Like Brazil, there continues to be little if any signs of heat stress in the short term.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
