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Friday, March 7, 2014, 8:19 am Submitted by: Dustin Weiner
The funds were active again last night and after a quiet opening, the soybean market took off as funds added to their long positions. The funds are within 15-18k contracts of their largest ever long soybean position, going back to the drought of 2012 (it will be ugly when this goes away someday, right?). Corn also saw nice gains last night as May corn on the CBOT broke the $5 mark earlier this morning (and has since came down off of that).
The soybean story is an easy one to tell as the projected carryout for this summer continues to shrink in the mind of the trader. We seem unable to ration export demand, and domestic crush margins are still strong – it now feels like the US will need to import a fair amount of beans this summer to avoid a “zero” for a carryout. Chinese crush margins improving overnight just added fuel to the fire (and fund longs to our market).
Outside markets are higher with Crude Oil higher at this time (UP 53 @ 102.09) along with a lower US Dollar (138.63 vs. Euro) and the US stock market is higher (UP 82).
Corn 2 to 4 cents higher
Soybeans 10 to 20 cents higher
And oh by the way – the big S&D report is out Monday. Details for trade guesses at the below:
Thursday, March 6, 2014, 3:35 pm Submitted by: Joel Pudenz
The corn and bean markets both closed higher today with corn adding a dime and beans adding 17 cents. Corn was supported by the funds as they were net buyers of around 10,000 contracts today. Ukraine exports are continuing as normal, but the people of Crimea will vote on whether to leave Ukraine and join Russia, keeping the market nervous about the situation. Weekly export numbers this morning were 59.8 mln bu. strong – we need to average 6.6 mln bu. a week to meet USDA estimates. Our Midwest weather looks to be warming up in the monthly outlook, returning closer to average.
Beans found support and traded near the highs achieved one week ago. Sales are currently 113 mln. bu. above USDA estimates; this fundamental landscape hasn’t changed. Domestic demand for meal remains strong, we haven’t seen any significant cancellations, and the funds were net buyers of beans, oil, and meal today. Monday’s USDA WASDE Report will give more insight on out the carryout picture could change with sales, imports, and potential cancellations.
Thursday, March 6, 2014, 7:59 am Submitted by: Dustin Weiner
The soybean market was trading double digits higher and the corn market had rallied off of its lows to trade slightly positive when electronic trading paused at 7:45am -- both markets can thank the weekly export sales report for their strength. This week’s report showed strong corn sales (above average trade expectations) and decent soybeans sales, right at the top end of expectations.
While the export sales report is a nice boost of friendly fundamental news – other news is hard to find. The USDA’s March S&D report will be out this coming Monday at 11am. The trade is looking for a slight shrinking of the soybean carryout while the corn carryout looks to stay close to the same – maybe a bit bigger. Don’t be surprised if sometime between now and the weekend this market drifts lower as we get hit with profit taking ahead of Monday’s report.
Wednesday, March 5, 2014, 8:12 am Submitted by: Dustin Weiner
The grain markets were mixed last night with corn trading anywhere from a penny higher to 3c lower and soybeans trading between 3c higher and 3c lower. There isn’t much for new news out of Ukraine and so far exports out of the Black Sea area are plugging along at a normal pace. This could allow the grains to take a breather today.
Outside markets are mixed with Crude Oil lower at this time (DN 29 @ 103.04) along with a higher US Dollar (137.30 vs. Euro) and the US stock market is higher (UP 18).
Tuesday, March 4, 2014, 4:38 pm Submitted by: Joel Pudenz
Corn closed 13 cents higher today, adding 20 cents the last two trading sessions. The Ukrainian situation is still volatile, but Russian troops have pulled back from the border easing some pressure. Ukrainian grain exports have not yet been affected but the trade is still concerned over the situation. Informa decreased production estimates in S.A. by 1 MMT which provided additional support. Funds were net buyers on the day. Any strong upward moves in corn may be limited by strong carryout estimates.
Spillover support from the corn market helped prop up soybeans today with May beans closing 13 cents higher. Domestic demand for soybeans remains strong as crushers remain profitable. Informa decreased S.A. soybean production by 1.6 MMT. We see demand for beans remaining strong (China, domestic use) while the world supply is slightly lower (S.A. declines); the fundamentals remain favorable to beans. This can change with Chinese cancellations, but we haven't seen any significant cancellations yet.
Tuesday, March 4, 2014, 8:10 am Submitted by: Dustin Weiner
The grain markets had a weaker tone to them last night as news out of Russia calmed a few fears. Russian President Putin pulled back some of his troops in SW Russia and investors feel that Russia is now backing down from the potentially large-scale military confrontation. Putin himself said that Russia’s takeover of the Crimean peninsula will not escalate into war: "We will not go to war with the Ukrainian people. If we do take military action, it will only be for the protection of the Ukrainian people”. This is a fluid situation and will be watched closely.
So… today appears to be acting in direct opposite of yesterday’s trade – gold & crude are lower while the equity markets are all higher. Some of the ‘risk premium’ that was added yesterday is being swiftly removed from the market.
Spring is inching closer… today is Fat Tuesday, the Illinois and Mississippi Rivers should see continued melting as temps warm up later this week, and Brazilian soybean harvest should be half done by the weekend.
Monday, March 3, 2014, 3:59 pm
Submitted by: Joel Pudenz
Corn opened higher this morning finding support from the political unrest in Ukraine. Ukraine is estimated to be the 3rd largest exporter of corn this year at 18.5 mmt. With 6 mmt left to export, the trade is concerned about a potential slowdown in shipments. Funds were strong buyers of commodities today as the stock market drops from the concerns in Eastern Europe. Export inspections were also supportive to corn today. Gains from this morning slowly dwindled into the afternoon, but nearby corn closed 6 cents higher at $4.64.
Soybeans traded mixed today with old crop closing 7 cents lower and new crop closing 2 cents higher – potentially an effect from bull spread unwinding. While Chinese crush margins are at a 2-year low, we have yet to see any significant cancellations materialize. Domestic crushers remain profitable amid recent price increases. Weather looks to be favorable in S.A., but feared logistical issues and recent declines in production estimates may provide short term support to beans.