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Middle Tennessee | My reports are back, if you are overwhelmed with the need to thank someone, thank 4-Row Cattle.
For a relatively slow day of news on a shortened MLK-holiday week, Thursday grain trade looked serious, as though it is setting up for markets to choose a direction by Friday close. Bears were put in check with the Jan 12 monthly WASDE and semiannual stocks report. On that day, there was evidence the corn market had simply run out of sellers. The January report typically generates limit moves one way or the next, but it was yawner this year, we had 14-cent range for corn. Most notably, sellers couldn’t find a single stop below $3.48 support with hedge funds more heavily short than ever before, according to the CFTC.
From that point, corn’s been leading the mini-rally with a weekly-chart gap 4-cents below tonight’s close. What was strange today was that wheat and soybeans showed mid-session strength while corn pulled back.
Soybeans were able to test levels from the strong weekly open, and traded through the 100-day moving average. For an hour at least. The bean bullspreads which have been running for the last couple weeks edged back for the second consecutive session.
Wheat was able to show a little green, even with a very firm dollar and the rouble making record lows. The GASC tender today was exceptional in that cash US export markets abandoned their perfunctory plunges into the tender in symbolic effort to make an offer. Not even a single bushel of US wheat offered this time. So while there may be some wheat bulls in Chicago thinking new crop acreage reductions, there seem to be none in Paris or Black Sea ports. US bulls could take charge of the market ultimately, but they’ll have to bring the spreads with competitors in some first it would seem. Unless that is the US is willing to write off the entire marketing year, given the super firm US dollar and ultra depressed rouble.
So today the corn market got some backup from wheat, soybeans and even the oil market. By now it seems the oil market gets more air coverage than Donald Trump, so everyone knows that crude traded to $25 this week if you round by fives. Today however it was able to claw higher into the weekly range with a bounce. On such a day I would have thought corn could at least head-fake toward its 100-day, after all that’s where the soybeans found a few stops today. Instead corn settled back a little with a test of the 50-day.
I’m leaning toward taking Friday’s close as guidance for the inter-commodity spreads and general direction of the complex next week. We’ll start the day with export sales announced at at 7:30 a.m. Wheat’s been pullin’ in bids for 300k or so metric tons recently, and soybeans 1.5 million. I’ll be looking closely for any surprise global demand for wheat or soybeans. | |
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LKCW Nightly: 1-21
