Morning Comments December 17, 2020

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Yesterday’s main feature was January soybean futures moving as high as $11.95. While not quite $12, that is the highest it’s been since November 23rd, when it did hit that level briefly. They finished the day down 1/2 at $11.83 3/4. Through the overnight, they’ve gained about 3 cents. It’s a little different story for corn, though, with March futures ending the day up 2 1/2, just over $4.27, and then trading mostly lower overnight. All of corn is in the red at the morning break, with March futures down 1/4. Another item to watch is wheat. Chicago March wheat traded up through $6 overnight, hitting $6.05 before the morning break and now stand at $6.02, up 3 1/2. This could give corn some support. While still range bound, all three are nearing the high end of that recent range. 

Opening calls:

Corn steady to down 1 

Beans 2 to 3 higher 

Today, we will see an updated export sales report. Yesterday brought more confirmation of concerns in the ethanol industry. Last week saw a 10 million gallon decline in production. Ethanol margins continue to be in the negative territory despite gasoline futures finally rallying enough to be worth more than ethanol futures, which would normally indicate better economics for blending. However, ethanol stocks also rose last week, jumping 36 million gallons. They were estimated at 964 million. 

Beyond that, we’ll also be watching forecasts and rain fall amounts in South America and continue to hope for more Chinese demand for both soy and soy products as well as corn and maybe even ethanol. 

Keep putting in offers and selling these spikes. That’s the best approach in a range bound market.