Early Market Talk

Markets continue to have underlying support from positive expectations on trade resolution with China and most recent soybean purchases. Longer term dynamics however remain bleak on soy prices.

At 0600 Markets are fractionally mixed with CH19 up a ¼ cent at $3.79 ½ with SH19 a ½ cent higher at $9.19. Chi wheat giving up a ½ cent with KC a ¼ higher. All on thin volume.

Lead month soybeans have closed inside a $0.10 range going on thirteen days now with corn closing inside $0.05 ¼ going on twelve. Still leaning toward on upside breakout on corn but going to need some help most likely in the news department and soybeans not showing the long-term reality.

Best guess on Fund activity yesterday had them buying 7K corn and 3K soybeans. Would make them net long of 86K corn and near 9K soybeans.

Soybean export inspections continue to run nearly 500 mln bu BEHIND the pace needed to reach USDA annual estimate of 1,900 mln bu. Given the size of the disparity suspect USDA will adjust annual exports lower in subsequent monthly Supply / Demand reports.

Saw a snip yesterday that suggested corn prices in Ukraine near $5.00 per bushel with a farmer cost of production under the $3.00 level. Makes one suspect corn production there is going up. For perspective. Ukraine grows near 4 billion bushels corn nearly equal to the state on MN. Ukraine does export near 80% of total production so it is a big deal in terms of world export trade.

SHSK near 80% of full carry and at 14 cents equals the best trade the SFSK saw in the weeks before first notice day. Any hedges that will not be priced off SH should be forward. 

USDA production, quarterly stocks and monthly Supply / Demand repots will be released this Friday at 11:00. Expecting another day much like yesterday…

Article Written by:

Bruce Nelson