January 28, 2016
Grain Marketing Specialist
Export sales are delayed until Friday morning due to early week weather on East coast
CORN- Down 1
A lot of indecision in the grains yesterday as funds were buyers but outside markets kept a lid on futures closes. News yesterday was released that China plans on boosting its agriculture sector by allocating more money going forward with goals of creating an additional 53 mln hectares of fertile farmland by 2020. Ethanol production was down 22k barrels from last week as ethanol stocks rose slightly. Average trade guesses for tomorrow’s export sales are 20 mln bushels. Nearby resistance for March futures remains at the 100 day moving average of $3.79 with support found at $3.6525. Below is a look at the corn/bean ratio for this coming fall. Currently, pretty neutral at a 2.3 with not a lot of incentive to swing large amounts of acres one way or the other.
SOYBEANS- Down 2
Early bean yield reports out of Brazil kept the market up Wednesday, still too early to tell how production numbers may look in a month. Crushing margins continue to dwindle with most margins a 1/3rd of what they were last year at this time. The U.S. export program is still going strong but the switch from U.S. to Brazil origin vessels may start occurring more frequently within a month’s time. If you are looking at marketing beans in the bin, I think it is important to look at where the cash trading range has been since harvest. Locally, we have been trading from $7.60 on the low to $8.40 on the high. Currently, we are towards the top end of the range at $8.20 cash. This may not be a bad point to start scaling in some sales before load limits in March. Nearby support for March beans is found at $8.705 with resistance located on the 100 day moving average of $8.81, which we closed slightly above on Wednesday and where we are currently trading.
WHEAT- Minneapolis Unchanged, Kansas City Down 1
Wheat news remains light with good weather in HRW areas over the next week and very little new export news. Wheat stocks remain large with little short-term bright spots as we approach the 20 day moving average showing support at $4.96 MWH16. India’s crop is estimated to be down 7% year on year due to El Nino influenced weather. France continues to offer wheat to Egypt well below U.S. current values. Export sales last year were 11.7 mln bushels versus this year at 7 mln bushels a week. Analysts expect export sales tomorrow to be in the 10-15 mln bushel range.