Morning Comments December 27, 2019


Opening Calls:

Corn: steady to 1 higher 

Beans: 2 to 3 higher 

We’re starting out with some green on the board following the overnight session. 

Corn, soybeans, wheat, oats, rice, canola and soy oil all higher. The only commodity with negative numbers is soybean meal. Crude oil is also slightly higher. Volumes remain light in this holiday-shortened trade week. 

There continues to be some cautious optimism regarding the phase one deal with China, but as one analysts point out, “keep in mind that this is an agreement between the 2 presidents, and could blow up at any time if either one becomes unhappy with the results”. That said, there remains hope that the Chinese will begin buying larger quantities of corn or corn-based products, like ethanol or DDG’s. We are also just 2 weeks away from the USDA’s January WASDE report, which many expect to show a reduced corn production number. Is this perhaps already being factored into the current prices? March corn futures are at their highest level since 2015 for this time of year, and at the current level, are slightly above the 100 day moving average. 

On the soy side of the discussion, we’re following Malaysian Palm Oil futures, which hit new highs. This is supporting soy oil values, and with many traders buying oil, they are also selling meal, which is why we’re seeing some red numbers there. Soy Oil is at the highest level since October 2017. There is also optimism here for increased Chinese purchases of U.S. soybeans and/or soy-based products. Tight farmer holding is also keeping basis levels strong. We are getting close to $9 at our Ralston soy plant, and are starting to see quite a few offers in that area there. Please continue to put your offers in, whether for Old Crop or New Crop.