March corn up ¼ at $3.75
March beans down 2 ¼ at $9.0525
The DOW is down
USD is stronger
Crude oil up $.45 at $56.04
Corn traders continue to see little movement in price. For the past three months, the new-crop DEC19 contract has essentially traded between $3.95 and $4.05 per bushel. The only really good news for producers is the fact old-crop basis has improved in some locations across the U.S. Producers who are still sitting on old-crop bushels and have both basis and flat-price risk open should be paying close attention. There’s really not much new to report. All eyes remain on U.S. and Chinese trade negotiations, with another round scheduled to take place this week in Washington. The weather in South America is somewhat of a non-event at the moment. Here at home, later in the week the trade will be focused on the USDA’s annual Ag outlook Forum scheduled for Thursday and Friday. This will be when the USDA gives us their early thoughts on the 2019 balance sheet. There will also be a heavy wave of U.S. export data released late in the week. The short term trend is slightly negative. The market is vulnerable to a near term drop to 368.25. Closing over 378.75 would undermine the outlook. Short, system types will find buy stops around 377.5. With March options set to expire this week, vol is implying a 368.75-380.25 trading range through Friday. While the 400 calls has the largest open interest, an underlying settlement Friday at 380 would result in max pain.
Soybean traders continue to keep a close eye on U.S. and Chinese negotiations. New-crop NOV19 prices continue to oscillate around the $9.50 level as traders await more details and information. Bulls are now arguing the worst thing might simply be an extension of the current cease-fire agreement or trade-truce that’s currently in play until March 1st. And if so, that is not all that bad, as China’s been buying fairly strong doses of U.S. soybeans during that window of opportunity. If that’s allowed to continue, then the bulls will be able to play that card in their hand and perhaps up the wagers a bit. As for South America, boots on the ground in Brazil suspect the country will be 45% to 50% harvested by the end of this week, which continues to run well ahead of schedule. Brazil’s weather has arguably stabilized, but the total crop is thought to have dropped to somewhere between 112 MMTs and 116 MMTs. The short term trend is neutral-slightly negative. The market is poised for a near term test of trendline support around 900, perhaps the last swing low at 891.5. The low Friday was 901.25. A close over 920.25 would provide fresh upside targets. Short, system types will find buy stops around 917.25. With March options set to expire this week, vol is implying a 892.75-923.75 trading range through Friday. While the 980 call has the largest open interest, an underlying settlement Friday at 910 would result in max pain.
January saw more bushels of beans crushed than expected, reaching 171.630 million bushels. Even though crushings were a bit down from December’s numbers, it still finished as the fourth highest NOPA crush to date. Soymeal exports climbed from 826,404 MT in December to 905,923 MT in January, while at the same time exports were stronger than January 2018 when NOPA members exported 860,416 MT of meal.