Softer to end the week is going to be the story today. Corn is currently down 4, beans down 5 and wheat down 8! Traders continue to be concerned about the impact of the virus in China and how this could impact trade. Weather in South America remains good for crops and bad for prices. Brazil has been getting about 4 inches of rain every week for the last two months which is making their crop bigger and bigger. Argentina weather has been normal for their growing season where they have had very few dry spells.
January is usually a bad month to make sales as we rarely see the market move higher to start the New Year. The graph below shows the CBOT action over the last 5 years by month. Historically we trade sideways October thru April with rally’s happening May thru July. The problem this year is that economics are still so bad for beans that no one is going to want to plant them again this year(outside of normal rotation). We will have high planting intentions for corn in March and whatever the price guarantee for corn in February is, we will lose that price on the March crop report. If you need to sell a commodity for cash, my advice would be to sell corn and keep beans. You should be selling old crop corn and new crop corn with futures at or near the $4.00 level. There are some really good basis levels for old crop corn. New crop basis levels are also at very good levels compared to where I believe they will be when harvest 2020 arrives.
Have a Safe Day!