Trade has been technical in nature this week. Both corn and beans have retraced to test support levels amid a lack of recent bullish news and some position-evening up ahead of next Tuesday’s USDA supply/demand report. All eyes will be on potential export increases and ending stocks decreases for both corn and beans. It feels that current market prices are already factoring some of that in.
That Brazilian trucker strike on February 1st was not widely supported, thus is quickly becoming a non-issue. However, wet areas in Brazil have another dose of rain in the forecast over the next 3-5 days, which could further delay soybean harvest and second season corn planting.
Southern plains cattle feeders have been able to price wheat into feed rations instead of corn. This will need to be watched, as any cracks developing in domestic demand (ethanol/feed) could signal that prices are doing their job– to ration demand. Overall, ethanol margins remain negative and many plants are running at reduced capacity for Q1. We all know what exports have been doing– no rationing there.
The US and the rest of the Northern hemisphere will be dealing with a market that needs more of everything. Planted acreage is likely to surge, but what remains uncertain is the product mix on those acres that remain undecided. The next few weeks will help sort that out.
Corn: down 1-3c
Beans: down 1-3c