Floor Talk January 4, 2021
At the close:
At the close, the March corn futures closed 1/4¢ lower at $4.83. May corn futures finished 1¢ higher at $4.84 1/4.
March soybean futures settled 2¢ higher at $13.13. May soybean futures settled 4 1/2¢ higher at $13.11 1/4.
March wheat futures closed 1 1/2¢ higher at $6.42 1/4.
March soymeal futures closed $5.70 short term lower at $423.70.
March soy oil futures settled 0.27 of a cent lower at 42.13¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.03 per barrel lower (-2.14%) at $47.49. The U.S. dollar is lower, and the Dow Jones Industrials are 552 points lower (-1.81%) 30,054 points.
Britt O'Connell, ever.ag, says that volatile is the best way to describe the grain markets, as of late.
"The overnight trade saw both corn and soybeans post significant gains that
started to fade as we entered into the mid day trade. Soybeans continue to be the leader while corn and wheat have been benefactors of the move. Fears of tightening U.S. stocks paired with concerns over South Americans crop fanned the flames in the bean market. On January 12, the USDA will take its monthly evaluation of the U.S. supply and demand balance sheet. The January report has historically proven to be volatile and as it stands today seems reasonable to assume for this year," O'Connell says.
Should the USDA trim either production or raise demand, both exports and crush have been strong for soybeans, ending stocks are at risk of falling below 100 million bushels, she says.
"If the ending stocks are estimated below 100 million bushels, it would be a level not seen since the recovery of the 2012 drought and massive corn acres planted in 2013. That year soybean stocks ended the year at a mere 92 million. Some analysts believe the number could be as small as 75 million bushels," O'Connell says.
Meanwhile, corn hasn't carried much of a story, but as the report approaches analysts are expecting the USDA to lower ending stocks, likely a combination of production reduction and possibly raising the export estimates, she says. "Strong Chinese corn demand will remain the greatest reason to be optimistic for higher corn prices," O'Connell says.
Re: Floor Talk January 4, 2021
My guess is a very large amount of farmer selling after the first of the year. And yet, beans are still up a little, and corn only down a little. I think that’s the sign of a pretty healthy market at the moment. I also would guess that the rally will continue by the end of the week. The fundamentals have not changed.