Markets are slightly lower this morning, following last weeks’ big selloff. Fund managers were aggressive sellers last week, trimming their long positions, on the combination of good South American weather and concern about new Covid strain world spread. Additionally concerning was the detection of ASF in Chinese hog farms and bird flu in South Korea. More than enough viruses/flus to deal with.
Weekly COT report Friday confirmed managed money long positions as of 1/19 had been cut to 350,000 corn contracts and 152,000 bean contracts. The market was in an overbought situation and primed for a setback, although supply/demand fundamentals remain very tight. This bull market is not over, just taking a break. Weekly EIA numbers were also out Friday and showed ethanol production and stocks at similar levels to week prior. Ethanol margins have improved with corn selloff and steady energy prices.
Energy markets are steady and equity markets slightly lower to start the week. Equities will focus on details of the next pandemic relief bill being considered.
Corn: down 2-3c
Beans: down 3-5c