CORN

• Corn is trading slightly higher today, after yesterday’s lower close and falling prices since the beginning of the year, which has seen March corn lose nearly 14 cents. Higher wheat prices are likely supporting corn.
• The US may see improved export sales in the coming weeks, following reports that US corn is now at over a 20 cent per bushel basis discount to Argentinian corn prices for February delivery. Although, there have been no flash sales reported since December 19.
• Brazilian weather is forecast to be wet over the next 7-days, and Mato Grosso and other northern regions have seen significant improvements from the recent rains. Mato Grosso so Sul and Sao Paulo remain too dry.
• Domestic corn demand has been firm as ethanol production has exceeded the USDA’s previous forecast for ethanol use. Friday’s report could feature supportive adjustments in demand.

SOYBEANS

• Soybeans have had a relatively wide trading range so far today and are now trading lower in the front months, while the November contract trades higher. Soybean meal is lower and soybean oil is higher.
• Part of the reason for the pressure in front month soybeans is the large number of deliveries against the January contract. So far, there have been deliveries on 1,632 contracts or 8.16 mb.
• Friday’s WASDE report will likely leave US production relatively unchanged. In December, they pegged the national yield at 49.9 bpa, with total production at 4.13 billion bushels.
• Trade learned yesterday that the funds exited their entire net long position in soybeans and now hold a net short position, but they also exited a large chunk of their long soybean meal position and continue to sell.

WHEAT

• Wheat is trading higher today in all three classes and is also lending some support to the downtrodden corn market. Prices remain well off their lows and are consolidating near the 100-day moving average.
• China has not made a purchase of US wheat since early December, but rumors have been circling for the past few days that China is looking to buy cargoes, which could account for the higher movement today.
• The storms moving through the central and southern Plains have been beneficial for winter wheat areas and could see crop conditions improve further, but below freezing temperatures next week may be harmful.
• Friday’s WASDE report will give traders an update on winter wheat seedings, and some analysts are expecting acres to decline more than expected. The average trade guess is at 35.8 million acres, which compares to the USDA’s last guess of 36.7 ma.

Author

Brandon Doherty