Soybeans closed 22 cents lower to a six week low after beneficial rain fell across Argentina and Brazil over the past couple of days helping to alleviate concern for crop stress in areas that were hot and dry last week. DDG cargoes have dropped roughly $30/ton in the wake of China rejections which could pressure soybean meal prices going forward. After trading through the 200 day moving average the next support for March soybeans sits around $12.60 on the board and beyond that it would seem destined for the harvest low of $12.48.
Corn futures couldn’t hold on to early session gains with weaker soybeans and wheat dragging them 1 ½ cents lower. Corn futures tested key support at the contract low of $4.1850 with the expectations that next week’s USDA report will show a larger crop size and carryout. US corn production numbers have increased from the November S&D report to the final report in 7 of the last 10 years while final corn demand has been below the USDA December forecast 6 of the last 7 years.
Outside markets were bearish with crude lower while the dollar traded sharply higher. China’s PMI declined for the first time in 6 months to 51.0 from 51.4 indicating an economic slowdown could be ahead. Keep in mind any number above 50.0 represents a growing economy however the reduction from 51.4 represents it’s growing slower than the previous month.
Kyle Lehman
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