Morning Commentary

March corn down 7 at $3.8025

March beans down 11 ¼ at $8.9075

The DOW is down

USD is stronger

Crude oil down $1.54 at $52.65

Good morning,

Corn prices struggle to gain upward momentum, in fact, finished last week lower after seeing no major U.S. buying by the Chinese and more headlines talking about the spread of the coronavirus. Technically, there’s talk that the MAR20 contract could quickly challenge the previous week’s lows down around $3.75 per bushel. Keep in mind, the MAR20 contract hasn’t traded sub-$3.71 since mid-September. The low was posted back in early-September at $3.65^6.

Soybean prices fell by more than -20 cents last week. The MAR20 contract has tumbled -60 cents from the start of 2020 and is now trying to find support around the $9.00 level. In early-December this contract traded down to around $8.83. This contract hasn’t traded sub-$8.79 since late-May of last year. Techincal traders say we need this psychological support at around $9.00 to hold or we could quickly retest the $8.80 area. The low was actually posted back in mid-May of last year at $8.41^4. The new-crop NOV20 contract hasn’t traded sub-$9.20 since early-September. It’s low was posted on May 13 of last year down at $8.74^6. Bears are arguing that another record crop out of Brazil and no major urgency for the Chinese to be buying U.S. surplus is enough to keep prices pressured, especially if the trade will soon be digesting headlines of +8 to +9 million more U.S. soybean acres in 2020.

USDA’s Cattle on Feed report showed 12.0 million head on January 1, +2% above last year’s levels. Placements in feedlots during December totaled 1.83 million head, +3% above 2018. Marketings of fed cattle during December totaled 1.83 million head, +5% above the previous year.

Some key Asian feed makers are having to pay more for higher-quality corn from the Black Sea region as a key traditional supplier, the United States, struggles with a weather-damaged crop. The U.S. corn crop is graded on a scale of one to four in descending order of quality, with the grain traded against the CBOT futures contract falling in the number two category. “This year there are more number three and number four grades of corn, mainly from the crop that gets shipped through Pacific Northwest ports to North Asia,” said a trader in Singapore. “Gulf ports are getting better quality, but it is expensive to ship corn from Gulf terminals to Asia.” Ukrainian corn is expected dominate Asian markets in February. Ukraine exported 14.2 million metric tons of corn by Jan. 20 for the 2019/20 season, compared with 11.2 million metric tons at the same time last year. About 13 million metric tons is still available for exports this season. (Source: Reuters)

The Land Market Survey by REALTORS Land Institute reports more than a two percent increase in land dollar sales volume across all types of land. Irrigated ag land and ranchland increases are similar to the national average while non-irrigated was up a modest 1.5 percent.  Expectations are for rates to increase at nearly the same levels in 2020. The median price for non-irrigated land increased to $5,500 per acre in the U.S., irrigated ag land neared $10,000 and ranchland totaled $4,500. The Institute says the rate of growth for sales increases were slightly slower than in 2018 and attributes depressed commodity prices as one of the reasons. Property is also taking longer to sell. (Source: Brownfield Ag News)


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