Missed some market news this week? Here's the market reports you need to get caught up.
Ag Market IQ
The USDA January Crop Production and Stocks Report came and went without much excitement. Granted we did see decent high/low ranges of 10.0 to 12.5 cents overall in corn and soybeans along with wheat finding a range of 13.0 to 14.5 cents; however, there wasn’t much changed overall to make the 80K plus shorts in corn turn and run to cover their positions on Friday.
There are plenty of reasons why the grain market could rise or fall in 2020. Demand could improve or supply could be tighter But higher prices likely will need help from another source too: Whether Wall Street money managers think crops are a good investment.
I can't think of a better way to describe the trade deal with China rather than a “big, beautiful monster” as the president had suggested last week. As that phrase left his mouth, it was the “monster” part that made me do a “gut check” regarding what could be in that 86-page detailed document. Would China actually buy the $40 to $50 billion worth of U.S. agricultural products as claimed?
I cannot tell you how many times I've had orders in to sell corn, for example, at $4.17. The market gets to $4.16….and in just two days the market falls to $3.90 and I am not sold. How did I miss that? Does the market actually know where my order is? How can the market hit Jim's or Joe’s order, but always falls shy of my order? Why do I mentally hesitate to simply sell “at the market” when the market fails to hit my exact price? Am I so stuck on getting my forecasted price of $4.17 that I am a deer in the headlight and cannot sell at $4.05? I am guessing that many struggle with the same problems.
The latest grain export inspection data from USDA was mixed but mostly positive, as soybean and wheat volume climbed higher week-over-week. Corn volume, in contrast, moved moderately lower from a week ago and landed on the low end of trade estimates.
Analysts expected USDA to show better sales for the week ending January 9 after the agency posted marketing-year lows for corn and wheat the prior week, as well as a fairly pedestrian soybean tally. To that end, USDA shared some mostly positive news that was nonetheless unable to move the needle on grain prices Thursday morning, which had tumbled into the red on a variety of other fundamental factors.
Corn futures prices rebounded overnight as traders adjusted their positions following the selloff of the past couple days. Nearby March and May futures prices each rose $0.35 cents. Soybean futures traded fractionally sideways overnight as sentiments over the Phase 1 trade deal began to ease. Wheat sought to reverse yesterday’s selloff overnight as strong international demand and short position adjusting raised futures $0.01-$0.03 higher.
Corn prices erased steep losses yesterday, rebounding significantly higher on a round of bargain buying that netted gains of around 3.5% by the close. Soybean futures followed corn higher with gains of around 0.5%, while technical buying lifted some wheat contracts more than 2% higher today.