ANOTHER DOUBLE-DIGITS GAIN FOR THE SOYBEAN MARKET TUESDAY

On Tuesday, the CME Group’s farm markets watch the soybean and wheat prices trade in the double-digit area.

In early trading, the March corn futures are 4 1/4¢ higher at $4.88. May corn futures are 4 3/4¢ higher at $4.89.

March soybean futures are 19 1/2¢ higher at $13.32 1/2. May soybean futures are 19 1/2¢ higher at $13.30.

March wheat futures are 12¢ higher at $6.54 1/4.

March soymeal futures are $3.30 short term higher at $427.00.

March soy oil futures are 0.77 of a cent higher at 42.90¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.18 per barrel higher (+2.48%) at $48.80. The U.S. dollar is lower, and the Dow Jones Industrials are 10 points higher (+0.03%) 30,234 points.

Al Kluis, Kluis Advisors, says that the outside investors still have their prints on the market.

“The latest CFTC report showed funds adding to their long positions in corn and soybeans, but the net position was less than expected. If the funds jump back into the market in a big way, then it can take prices higher, because farmers are not reluctant sellers,” Kluis stated in a daily note to customers.

Kluis added, “The most recent report from my source on South America’s crop shows projections moving lower. The size of the Argentine corn and soybean crops have dropped by 1 million metric tons, and the size of the Brazilian soybean crop has dropped by 2 MMT. For all of South America, the total corn crop is now 5 million metric tons (200 million bushels) less than last year and the total soybean crop is just 10 million bushels higher than last year and trending lower.”

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Monday’s Grain Market Review

On Monday, the CME Group’s soybean markets closed off their daily highs, as South America’s crop continues to battle dry weather.

At the close, the March corn futures closed ¼¢ lower at $4.83. May corn futures finished 1¢ higher at $4.84¼.

March soybean futures settled 2¢ higher at $13.13, after reaching as high as $13.42. May soybean futures settled 4½¢ higher at $13.11¼, below its daily high of $13.39.

March wheat futures closed 1½¢ higher at $6.42¼.

March soymeal futures closed $5.70 short term lower at $423.70.

March soy oil futures settled 0.27¢ lower at 42.13¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.03 per barrel lower (-2.14%) at $47.49. The U.S. dollar is lower, and the Dow Jones Industrials are 552 points lower (-1.81%) 30,054 points.

Britt O’Connell, ever.ag, says that volatile is the best way to describe the grain markets, as of late.

“The overnight trade saw both corn and soybeans post significant gains that started to fade as we entered into the midday trade. Soybeans continue to be the leader while corn and wheat have been benefactors of the move. Fears of tightening U.S. stocks paired with concerns over South America’s crop fanned the flames in the bean market. On January 12, the USDA will take its monthly evaluation of the U.S. supply and demand balance sheet. The January report has historically proven to be volatile and, as it stands today, seems reasonable to assume for this year,” O’Connell says.

Should the USDA trim either production or raise demand, both exports and crush have been strong for soybeans, ending stocks are at risk of falling below 100 million bushels, she says.

“If the ending stocks are estimated below 100 million bushels, it would be a level not seen since the recovery of the 2012 drought and massive corn acres planted in 2013. That year soybean stocks ended the year at a mere 92 million. Some analysts believe the number could be as small as 75 million bushels,” O’Connell says.

Meanwhile, corn hasn’t carried much of a story, but as the report approaches, analysts are expecting the USDA to lower ending stocks, likely a combination of production reduction and possibly raising the export estimates, she says.

“Strong Chinese corn demand will remain the greatest reason to be optimistic for higher corn prices,” O’Connell says.

Al Kluis, Kluis Advisors, says that the grain markets are off to a great start.

“For the first time ever, I see a gap on my weekly, monthly, and even yearly continuation charts for corn and soybeans. The bull spreads firming in corn and soybean futures show continued strong demand. I see no evidence yet of price rationing. The gap higher sets up our next price targets,” Kluis stated in a daily note to customers.

Kluis added, “I am watching weather and crop conditions in Argentina where I see no major rain events in the forecast. Now their yield potential will continue to drop. Corn production in the five main grain-producing countries is already below last year. It is just a matter of weeks until the soybean production falls as well.”

SuccessfulFarming

Tags: CME Group