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Grain Notes 1/17/2020 PM Comments
Good afternoon. A strong day for corn and beans followed making up yesterday's losses. March corn was up 13 3/4 to 3.8925 and December was up 8 3/4 to 4.0275. March soybeans were up 5 3/4 to 9.2975 and November futures were up 4 1/4 to 9.6025. For the week March corn was up 3 1/2 and March soybeans were down 16 1/4. Markets dropped hard yesterday because of fund selling and today funds were back in the market buying back those contracts on rumors of the Chinese buying 4-5 cargoes of PWN corn. US origin corn out of the PNW is competitively priced into China today. Other Chinese news kept the markets in check as they said their hog herd is down 27.5% from a year ago raising more doubts on soybean demand and China also reported GDP growth of 6.1% their weakest in 30 years. South American weather is turning drier, but not enough to get anyone too excited. In outside markets the dollar index is up .28 to 97.60, oil is up 9 cents to 58.62 and the Dow is up 20 points.
Just as a remainder the markets will be closed in observance of Martin Luther King Jr. day on Monday and will reopen Monday night at 7 pm. River Valley Coops offices will be open all day on Monday and we will be at the Quad City farm show this weekend.
December corn funds moved back above 4.00 to 4.0275. We are getting a lot of offers at 4.04 as their is resistance at 4.05. If want to sell new crop corn and get a extra consider selling a premium offer with it by selling a 4.20 March 21 call to get an additional 20 cents. If you want more information on how this time of premium contract would work give Kurt Kramer a call at 563-285-1712.
Rumors are circulating that China is in the market for 4-5 cargoes US corn off the PNW. US corn is the cheapest but their is a mismatch in the spec between PNW specs and Chinese specs. That said it was enough to get the funds worth as many believe China needs to import a significant amount of US corn, wheat, and rice to hit the dollar goal in the phase 1 agreement and this could be a starting point to that. That amount of corn is around 250 million bushels.
U.S Agriculture Secretary Sonny Perdue announced yesterday that he still expects farmers to be paid a third and final tranche of the 2019 trade aid, even after Phase 1 was signed.
This afternoon's commitment of traders report shows funds were 79,140 contracts short in corn and 3,185 contracts long in soybeans on Tuesday. Both those numbers were in line with estimates. They were estimated buyers of 22,000 corn contracts and 5,000 soybean contracts today. After the past few days their estimated net position on corn stands at 91,140 short and 7,815 contracts short in soybeans.
From a chart perspective March corn support moves back up to the 50-day MA at 383 ¼, then the December 371 low, then the contract low at 365 ¾. Resistance moves back up to 392, then 393 ½. March soybeans have support at the 200-day MA at 921 ¼, then 915 ¾, 903. with resistance at 939 ½ - 942 ½ up to 950.
Have a great evening.