Morning Commentary

Hard open today so no changes from Friday’s close.

Good morning,

Corn prices have shown little to any movement since the Christmas break with the MAR20 contract continuing to consolidate between $3.85 and $3.90 per bushel. Keep in mind, back in early to mid-October this contract pushed to just over $4.10 per bushel. Cooperative weather in South America seems to be keeping a lid on current prices. There are more headlines circulating about strong production in Brazil and heavy talk of more second-crop corn acres. The good news is record-setting Brazilian exports of beef, pork, and poultry, and the opening of corn-based ethanol plants should help increase their domestic corn demand, but at the same time, it’s strengthening cash prices in many areas and encouraging more acres. The trend for March corn is neutral.  Stable trade outside 379-395 is needed to provide fresh trending targets. 

Soybean prices have rallied by approximately +10 cents since the Christmas break with the MAR20 contract pushing to levels not seen since late-October. The contract is still however about -30 cents below its twelve-month high at $9.82^2 posted back on January 9 of last year. Bulls continue to speculate on increasing Chinese demand and improved trade relations. Bears remain focused on cooperative weather in South America, talk of perhaps another record harvest in Brazil, and early speculation of +9 million more planted soybean acres here at home in 2020. The trend for March beans is neutral-positive.  Stable action over 950.5 is needed for a run to the recent swings high near 970. Closing under 933.55 alerts for a correction. 

China’s agriculture ministry said on Monday it plans to issue biosafety certificates to a domestically grown, genetically modified (GM) soybean crop and two corn crops, in a move toward commercializing GM grain production in the world’s top market. Beijing has spent billions of dollars researching GM crops, but has held back from commercial production of any food grains because of consumer concerns about their safety. China granted biosafety certificates to its first GM corn varieties and two domestic rice varieties in 2009, but has never moved to commercialize these crops. Some in the industry believe Beijing’s most recent move could mean that China is ready to start commercialization of some domestic GM crops. China has said it aims to push forward the commercialization of GM corn and soybeans by 2020. Beijing has long approved imports of these products. (Source: Reuters)


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