Early Market Talk

Lethargic markets overnight with corn confined in a one cent range and soybeans inside 4 cents. At 0630 CH19 unchanged at $3.82 with SH19 off $0.01¼ at $9.22 ¾. (vol 9,579 and 8,937 respectively)

Crude giving up 31 pts at $52.05 this morning and touching its downtrend line drawn off the Oct 3rd high of $76.26. Crude $10 off its low set Dec 24th and on the longest rally attempt since September.

Race to lower Brazil soybean production continues. Yesterday Ag Rural reduced its forecast to 116.0 mmt from their previous estimate of 121.4 mmt. USDA last estimate was 122 mmt. Our colleagues in Brazil were at 166 mmt a week ago.

Entering day 20 of partial Gov’t shutdown. No USDA reports tomorrow as had been scheduled. As previously noted, reports will be rescheduled once Gov’t funding resumes.

Trade delegation wrapped up 3 days of negotiations with both sides making favorably comments on progress. Progress reportedly made on the huge issues of forced technology transfers and intellectual property rights. No specific date mentioned on when they get together again but could be as early as next week.

Soybean deliveries continue to recirculate with 938 lots put out overnight. Open interest at 1,488 contracts as of this morning.

Corn and soybean price strength yesterday accompanied by increasing open interest. Corn OI up 8K and soybeans near 5K. Increasing OI would imply new buying rather than short covering.

Corn market continues in ever tightening range and working into apex of a triangle on the charts. Most expect a sizeable move on a breakout. Which way the question. Bias continues to the upside. Technically corn market has gotten itself into overbought territory on the daily chart.

Markets looking for a story this morning…

Article Written by:

Bruce Nelson