Morning Comments January 15, 2020

Soybeans Clean

Corn: Steady to up 1

Beans: down 1 to 2

Today is the official signing of the “Phase One” trade agreement with China. The trade is expecting increased buying of U.S. beans by the Chinese. The big question is how much more and when will this increased buying take place? In December China bought 9.5423 MMT of soybeans which is a 19 month high. Does this mean China’s appetite for U.S. beans is already increasing? NOPA will also release their crush data on beans at 11:00 a.m CST. With the long-term weather forecast in South America being more of a corn play than beans, and with sources looking for an additional 10 million acres of soybeans, the Phase One deal looks to be the only possible bullish factor at the moment.

Corn is also interested in what Chinese demand will be going forward. Will China buy more corn or will the focus be on ethanol, DDG’s, and sorghum? The long-term forecast for South America is dryer, which has the potential to impact Brazil and Argentina corn. There are sources inside of Argentina that believe the USDA is already 2 to 3 MMTs too high on their estimate. As the trade watches the weather, they are also concerned about the possibility of 94 million acres of corn being planted in the U.S.

With all of the uncertainty in the markets, contact your local GMA to help you manage your marketing risk with several contract options that are available.