Morning Commentary

March corn up 2 ¼ at $3.735

March beans up 5 ¼ at $8.985

The DOW is up

USD is stronger

Crude oil down $.52 at $51.59

Good morning,

Corn prices are higher this morning, but have come under pressure this week as less optimistic headlines have been circulate regarding Chinese trade negotiations. A Reuters report was circulating inside the trade yesterday that was titled, “U.S. trade chief saw no progress on key issues in China talks: Senator” .  The article starts off like this… “United States Trade Representative Robert Lighthizer did not see any progress made on structural issues during U.S. talks with China last week, Republican U.S. Senator Chuck Grassley said on Tuesday as plans emerged for higher-level discussions at the end of January.” The short term trend is negative.  The market not only broke a string of three higher swing lows since September but looks poised to test the gap on the weekly continuation chart at 366.75.  A close over 379.75 would confirm an end to the pullback.  Short, system types will find buy stops around 378.  Options are pointing to a 367.75-379.25 trading range the rest of this week. 

Van Trump says “Soybean prices are a bit higher to start the morning, but have given back about -35 cents from last weeks highs. We talked last week about using the rally to reduce risk, just in case the bulls became irritated or bored with the lack of headlines. There’s very little fresh or new being released in regards to U.S. and Chinese trade talks. That which is being circulated has turned more towards doubt and pessimism than resolution and optimism. Senator Chuck Grassley’s recent comments added a bit more uncertainty. I personally want to remain optimistic, believing U.S. leaders will be able to negotiate some type of deal with the Chinese in regard to U.S. agriculture. To this point most inside the trade estimate the Chinese have purchased around 5 million tons of U.S. soybeans from the 2018 harvest. For comparison, in 2017 China had booked just over 23 million tons of U.S. soy, by this date. Lets keep in mind, there’s also continued headlines about African Swine Fever spreading across China and talk of close to 1 million hogs having been culled to this point trying to slow the spread. Chinese soy demand has been under pressure and prices are weak as hog margins are pressured.” .  The short term trend is neutral-negative.  Rallies capped at 906.25 leaves the market in position to test the swing low at 880.5.  A close over 914.25 confirms an end to the pullback.  Short, system types will find buy stops around 902.  Options are pointing to a 885.25-908.25 trading range the rest of this week. 

French commodities trader Louis Dreyfus Co moved to third place in the rankings for Brazil’s biggest soybean exporters in 2018, located in a dead heat with China’s COFCO, according to annual shipping data. Bunge continued to top the rankings, while Cargill remained in second place. Brazil, the world’s largest soybean exporter, shipped a record 84 million metric tons of the oilseeds in 2018 after harvesting its largest crop ever, with most of it going to China. (Source: Reuters)

National Oilseed Processors Association (NOPA), informed the industry that the soybean processing pace jumped in December to the third-highest level ever and a record for the final month of the year. From what I understand, NOPA members crushed 171.759 million bu. of soybeans last month, surpassing the 166.959 million bu. processed in November and the 166.305 million bu. crushed in December 2017.


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