November 19, 2020
Good Morning,
Weaker markets to open the day with corn down 5 and soybeans down 7. The grain markets are losing the outside market tailwinds as the week progresses and have taken the opportunity to bank some profits off multi-year highs this morning.
This morning’s weekly export sales report showed corn at 42.9 Mil. Bu compared to the 10 week average of 67.5. Soybeans came in at 51.0 Mil. Bu. compared to the 10 week average of 85.2. While both were lower than the 10 week average they were above trade estimates.
Soybean prices are retreating on news that central and north Brazil saw .50-2.50 inches of rain. This was more than expected. There is also talk that the dry areas of south Brail and north Argentina could see some new rains. Lack of new China buying US soybeans is also offer resistance near new contract highs. China soybean crush margins have turned negative.
Overall demand for U.S. commodities remains extremely strong and will keep the trade skittish into the new year, and until a decent South American harvest can be reasonably assured.
There is too much Covid news for the markets to resume a higher path for now. Fund managers are banking some profits, which started in Europe overnight. We have seen hardly any break in the market lately, but we have also seen prices close well off the high’s for several sessions. This could be the beginning of the volatility state of the market. Remember, we don’t run out of beans in November, we run out in August, and a lot is going to happen between now and then.
Have a Safe Day!
Garry Gard
920-348-6844
November 18, 2020
Good Morning,
Markets stronger this morning with corn up 3 and soybeans up 15.
Early indications are that the market is giving some strength to reports from the FDA and private pharmaceutical. The Food and Drug Administration issued an emergency use authorization to Lucira Health Inc’s rapid result All-In-Test Kit. The test can be self-administered and provide results in 30 minutes or less.
Pfizer said final results from the late-stage trial of its COVID-19 vaccine show it was 95% effective, adding it had the required two-months of safety data and would apply for emergency U.S. authorization within days.
Prices finished off the highs yesterday, with weakening outside markets. Corn has mostly been a follower, and hasn’t even tried to test the Crop report high from last week. The Funds are already long so many contracts it’s hard to get much more push.
While we are getting closer to a vaccine, it is still a long way off from distribution and with numbers on the rise we are seeing more and more areas close down again. It’s going to be a long grind but making some sales with the current market strength will help producers weather the storm.
Have a Safe Day.
Garry Gard
920-348-6844
November 16, 2020
Slightly firmer markets to start the week with corn up 4 and soybeans up 2.
Limited news over the weekend has the markets feeling stale. With the continued concern over COVID and what implications looming shutdowns could have on the economy, traders will remain wary. Producers should not be complacent and thinking the markets are going to continue to climb or even hang where they are. If we were to see a 4-6 week shutdown this market could crumble back to the numbers seen last spring! The USDA’s report on Tuesday had a 11.5% stocks to use ratio. This could easily climb to 15% with a shutdown. $4 can still be sold for April forward and is a level I would recommend making sales.
Have a Safe Day
Garry Gard
920-348-6844
November 13, 2020
Good Morning,
Corn is down 1, beans up 3 and wheat down 3 to open the day. The corn and wheat markets have completely wiped out the gains from the USDA report on Tuesday.
The last two days we have seen the market shifting to what would happen under a Biden Presidency as his COVID19 advisor proposed a 4-6 week national shutdown to control the virus despite having a vaccine. This action would strike directly at the US’s productivity and demand for certain commodities. As experienced in the last shutdown, gasoline took a major hit in usage and still hasn’t fully recovered. Less gasoline usage also reduces the US ethanol consumption. As the USDA removed 465 mbu from the US S/D that pushed carryout below 1.8 bln with new export expectations and lower production, now the trade is presented with a governmental action that could add 250 mbu of supply back to the corn table from reduced corn for fuel ethanol production. COVID19 cases in the US has had some states (CA, IL, IA, MN) take early action to stave off rising positivity rates. Not only is the domestic situation under the threat of shutdown but how much will it bleed into import/exports where countries, who believe they have the disease under control, look to hold off from reimporting the disease.
As I have stated in the last couple weeks, producers should not be complacent and thinking the markets are going to continue to climb or even hang where they are. We have lost 20 cents in the last two days and if we were to see a 4-6 week shutdown this market could crumble back to the numbers seen last spring! The USDA’s report on Tuesday had a 11.5% stocks to use ratio. This could easily climb to 15% with a shutdown. $4 can still be sold for April forward and is a level I would recommend making sales.
Have a Safe Day!
Garry Gard
920-348-6844
November 12, 2020
Good Morning,
Weaker markets overnight as corn, soybeans and wheat trade lower. At this time corn is down 3 while soybeans and wheat are both down 5. The last two days have resulted in corn giving back half of Tuesdays gain.
Support levels on the CBOT for CZ20 are in the $4.02 to $4.05 range which looks a long way off at this juncture but still very much attainable. It might be worth pointing out that the supply situation, both inside the United States and globally, are unlikely to change much before January when the final production report for the U.S. is released and more information is known about South American crop prospects. Trades will be left to focus on demand indicators such as the pace of exports and ethanol grind, which is a bit of a mixed bag at present. Exports remain incredibly bullish, but still only account for 18% of total demand even with the USDA’s record forecast. Ethanol grind is projected at the second lowest marketing year total since 2012-13 as margins continue to yo-yo between profitability and losses. Livestock prices are below long-term moving averages with a fair amount of anxiety hanging over the market as long as coronavirus-related restrictions remain a concern.
I am not going to predict where the market is going to be five minutes from now let alone 5 months from now, but producers are currently able to lock in some very good prices out into the summer months and should actively be marketing grain.
Have a Safe Day!
Garry Gard
920-348-6844
