Grain Notes 10/16/2019 PM Comments

Good afternoon. Tough day for the markets with both corn and soybeans down. December corn was down 1 1/2 to 3.9175 and March was down to 3/4 to 4.0350. November soybeans were down 6 to 9.28. The market floundered today as it waits on details for phase 1 US-China deal the longer we go without details the more nervous the market gets on it. Combine rolling well across the nation put pressure on the soybean market and we have a good weather window until the weekend. Rains do return in the weekend, but the extended forecast is cool and drier. Export corn sales to Mexico were fairly routine and no new export sales were announced for beans. Biofuel discussions to fix the small refinery exemptions are going backwards. In outside markets the dollar index is down .28 to 98.00, oil is up 50 cents, and the Dow is down 22 points. 

  • The EPA's biofuel proposal was met with discontent from both sides as now both are threatening the use of legal and political action to undo the proposal which calls for small refinery exemptions to be granted based estimates which the large refineries will have to make up for by blending more. It calls for a 15 billion gall RIN requirement in 2020, but with little growth after and no retroactive action to add back the small refinery exemptions from prior years. When it comes to corn usage very little increase is expected.
  • Mexico bought 228 tmt of corn this morning, but that makes economical sense via rail. Where the US is losing out is to Japan/Korea and other countries in the Asian region with Brazilian corn being 10-15 dollars per metric ton cheaper and quality just as good. The market was disappointed no new soybean exports were announced. There are rumors that China bought 15 cargoes of Brazilian beans from November forward. 
  • Funds were back on the selling side today selling an estimated 3000 corn contracts and 6000 soybean contracts.. They are now an estimated 115,859 contracts short in corn and 31,464 contracts long in soybeans.
  • Looking at the charts December corn has support at 3.8450 then the 50 day moving average of 3.7775 with resistance at 3.9325 then the 200 day moving average of 4.0150. November soybeans have support at 9.25 then the 200 day moving average of 9.1050 with resistance coming at June's high of 9.48.

Have a great evening.