Early Market Talk January 13, 2020

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Quiet trade to start the week after uneventful USDSA reports on Friday. A barrage of adjustments made with production in the ‘18/’19 and current crop years, demand and qtrly stocks kept analysts busy. At the end, not much structural change in where we are today. Price scatter leaves markets perhaps slightly undervalued. Perceived changes (exports) going forward and results from phase one trade deal set the tone?

After starting firm Sunday night markets have relaxed. At 0600 CH20 a ¼¢ higher at $3.86 with SH20 off 4 ¼¢ at $9.41 ¾. Both on modest volume. KC and Chi wheat off 3 ¾¢.

Feed use in the current 19/20 balance table at 5,525 looks high and could well represent a crop overestimation like a year ago. Unfortunately, will not know until next September.

Focus will soon shift to ideas on the 20/21 crop cycle. More corn acres and trend yield likely produce a negative looking price outlook. Just how soon trade focuses on that possibility remains the 900 lb. gorilla in the corner of the room.

Clock ticking on US soybean exports. Need to make some serious progress in the next couple months if we have any hope of hitting the USDA soybean export forecast of 1,775 mln bu let alone increasing it.

Export sales on Friday well below trade expectations and not helping the above. 

CFTC data Friday showed Funds covering more of their net short positions in corn and soybeans. As of this morning we have them net short 85K corn and long 2K soybeans.

Will update corn and soy price scatters later this morning…

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