News

Morning Commentary

March corn up ¼ at $3.785

March beans down ¾ at $9.1675

The DOW is up

USD is stronger

Crude oil up $.48 at $53.59

Good morning,

Corn  bulls are happy to see renewed buying interest in the export market. The USDA yesterday announced a sale of +120k metric tons to an “unknown” along with a bit more buying from South Korea. There continues to be rumors and talk of China perhaps sniffing around the U.S. corn market but absolutely no official confirmation. CONAB raised their corn production estimate for Brazil on thoughts of larger second-crop production. Remember, the soybeans are coming out of the ground early in Brazil, meaning second-crop corn might see less weather related stress late in the season. Here at home there’s still a ton of debate about new-crop corn acres and just how many will be planted? The short term trend is neutral-slightly negative.  The market is vulnerable to a drop to 368.25.  Closing over 378.75 would undermine the outlook.  Short, system types will find buy stops around 381.75.  Options are implying a 373.5-383.25 trading range the balance of this week. 

Soybean  traders continue to digest mixed headlines about Chinese demand and ongoing trade negotiations. The latest is that President Trump would entertain extending the deadline if we are close to making a deal. With this situation being so fluid and ever changing it’s extremely difficult to trade the headlines. The short term trend is neutral.  Consecutive closes outside 906.5-920.5 is needed to provide fresh trending targets.  Short, system types will find buy stops around 920.5.   Options are implying an 906.25-927.25 trading range the balance of this week. 

Biosev SA, the Brazilian sugar and ethanol maker controlled by commodities trader Louis Dreyfus, said its loss in the 2018/19 cane season through December rose 8.4% from the previous season to $240.40 million. Biosev on Tuesday reported a loss of $62 million in the third quarter ended in December, mostly due to the depreciation of the Brazilian currency. The loss was 17% smaller than in the same period a year earlier. Almost 90% of Biosev’s $1.6 billion in debt is dollar denominated. The company said the currency fluctuations have a non-cash effect, since the majority of the debt matures between 2021 and 2023, when the company plans to have enough cash to pay. (Source: Reuters)

Traders are bracing for increasing supplies at Cushing, Oklahoma, the delivery point for benchmark crude futures, as unexpected refinery issues add to inventories that are already at the highest in more than a year. Inventories at Cushing rose to 42.6 million barrels in the week to Feb. 1, the highest level since early January 2018, the U.S. Energy Information Administration said. Problems at a key Midwest refinery, along with upcoming seasonal maintenance, have traders believing supplies will rise more than expected at Cushing in coming weeks. (Source: Yahoo) 

 

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