Corn eyes overseas markets, while soybean crush accelerates

Grains and oilseeds report

Grain, field, crop Grain, field, crop

Corn: On a technical basis, the March still has plenty of room before hitting the downtrend line at 742-1/2, which should allow for speculators to buy the March on any positive news as well. There are two ways to view these smaller stocks right now. Either A) importers see our low stocks update and buy now before prices become even higher down the road or B) U.S. corn was overpriced before and is even more overpriced now.

There is little doubt that the new stocks number on Friday should help to bounce prices everywhere. What we need to be concerned with is how U.S. corn competes with others. Let’s also not forget to watch the export report each week. Until more is known about spring weather, this market will go right back to putting full focus on demand. In past weeks, that has not been good news but as stated before the stocks report will provide to fuel, any pickup in demand will provide a bullish spark. Bulls and bears will watch the demand reports closely with each side likely to jump on any good/bad demand news…Ryan Ettner

Soybeans: The NOPA crush number released Monday shows that we continue to crush soybeans at a phenomenal rate. NOPA, the U.S. oilseed industry organization, suggested soybean crushing in the month of December totaled 159.899 million bushels. That was down from private estimates of 161.1 million. Allendale points out the level is still 10% above last year. Between September and December, the year-to-date crush is 10% above last year. To meet USDA’s goal of a 6% total year decline, it will now have to run 13% lower than last year between January and August…Jim McCormick
Wheat:  Temps have cooled off recently, but our weather service doesn’t feel like the cold temps we experienced, and will experience Monday evening, will have any adverse effect on the crop.  The 6-10 and 8-14 day NOAA forecasts are suggesting much drier and much colder weather conditions which could imply some damage in the coming weeks. Cold temps could be affecting Russian wheat in the coming week, causing Russia prices to rally. We need to see an increase in exports going forward as demand is in question and until we see a pick-up in exports continue to sell strength…Cordon Sroka

About the Author

Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Jim McCormick is Senior Broker/Manager at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA.

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