Early Market Talk

Markets in search of news / headline overnight to set short term price direction. Fractional changes overnight suggest the hunt continues. At 0630 CH19 and SH19 each off a ½ cent at $3.80 ¼ and $9.91 ¾ respectively. Chi wheat scratching out a ½ cent gain with KC giving up ¾ of a cent.

Lead month corn inside a ¾ range overnight with soybean not much better at a $0.02 ½ range.

First batch of CFTC data showed trade off considerably on Fund net corn length. Updated data suggests Funds net long 63K corn and 8K soybeans.

USDA reports Friday which will includes updated estimate for Brazil soybeans. Average trade guess for Brazil soybean production at 117 mmt down 5 mmt from the December report. Our colleagues in Brazil and another well followed observer has them at 112 and 113 mmt. For perspective if the total output is indeed 112 mmt that would represent a 3.7 bpa drop in yield from the December report.

Trade looking for a drop in US soybean carryout? If true, likely must all come from a lower yield?

State of Parana in Brazil reported 25% harvested and significantly ahead of normal. Last year this date they had yet to start harvest.

Corn and soy price continue to run inside well-defined ranges.

Lunar New Year has China in Holiday mode and little fresh news expected from them until this wraps up.

Trade should see some additional announcements of recent Chinese soybean purchases. The 2.6 mmt announced yesterday were on top of the 612K tonnes announced Friday. Should see announcements of near 1.8 mmt additional sales.

Hurry up and wait for Friday and barrage of USDA data…

Article Written by:

Bruce Nelson