January 22, 2021
Good Morning,
Friday and the markets look like they could be headed lower to finish the week.
China reported an outbreak of African swine fever in the southern province of Guangdong – the country’s first reported cases of the deadly disease in almost three months. African swine fever ravaged the pig herd in China, the world’s top pork consumer, after the first outbreak in mid-2018, killing millions of hogs. The industry has recovered, however, with the herd growing by 31% year-on-year to 406.5 million heads by the end of 2020. The Guangdong outbreak occurred on a farm in a county with 1,015 pigs, killing 214 of them, the Ministry of Agriculture and Rural Affairs said in a statement, adding that illegal transportation was the suspected cause.
Fear of covid and a change in relations with China has set the market on its heels. New entrants into the long side of the market are in for a tough day, as the market is going to make them pay to play. For whatever reason the corn market has not broken very much compared to beans and the funds have not sold a lot of corn position recently, but it may be time.
Producers should not panic but the bullish mentality in the market is most likely not going to remain. There are too many things at play for the markets to continue to move higher.
With the funds extremely long, Covid concern around the world, African Swine flu and better South American weather I could see the markets close considerably lower.
Have a Great Weekend!
Garry Gard
920-348-6844
January 20, 2021
Good Morning,
Well maybe not in the grains or the temperatures. Corn is currently down 8 and soybeans are down 24.
We have been long overdue for a correction and it appears to be here. While I don’t believe we set back dramatically, I could see another 10-15 cents come out in the corn market on profit taking.
The U.S. Environmental Protection Agency (EPA) on Tuesday granted three waivers to oil refiners that exempt them from U.S. biofuel blending obligations, a last-minute move before President Donald Trump leaves office on Wednesday. The agency granted two waivers for the 2019 compliance year and one waiver for the 2018 compliance year. The announcement followed four years of controversy around the waiver program under the Trump administration, but left many questions unresolved
Export companies in Argentina are concerned about independent truck owners who are blocking roads as part of a protest over what drivers say are exorbitant taxes and highway tolls, the CIARA-CEC export industry chamber said on Tuesday. Owners and drivers, grouped in the informal TUDA association (Transportistas Unidos de Argentina), began blocking highways over the weekend, making it hard for grains to reach port terminals. The protest adds uncertainty to a sector that was racked by several Argentine port workers’ strikes last month.
Look for trade to continue to take profits and monitor south American weather and strike issues for direction.
Have a safe Day!
Garry Gard
920-348-6844
January 19, 2021
Good Morning,
Markets are softer this morning after the 3 day weekend. Corn is down 4 and soybeans are down 24.
Soybean prices dropped overnight, with concern over an increased out break of Covid in the Hebei province in China. The densely populated area around Beijing is seeing the largest outbreak in 10 months. Covid restrictions are increasing, and a larger lockdown may be coming.
The trading range is expanding, making for a much more volatile trade. Beans traded 30 lower at one point last night on the fear coming out of China. In the last 6 or 7 trading sessions, the market has expended a tremendous amount of energy. Any new longs can’t feel very good this morning. It’s up to the funds to defend their position today. If the market doesn’t have the ability to bounce back tomorrow, this could lead to a deeper correction. Which is probably due.
Russia announced a $1.65 export tax on wheat exports after March 1. Russia fob wheat prices tested $300 or 8.20. This could suggest as much as 5-7 mmt of Russia export demand may have to be shifted to other origins. This could also suggest nearby Chicago wheat futures could test 7.50. Ukraine will decide on Jan 25th on whether to restrict corn exports bases on raising interior feed costs.
Dry weather has returned to Argentina, with limited rainfall in the 10 day forecast. Southern Brazil also dries out in the same time frame, putting most of the rain into the same location in Eastern Brazil. Flooding rains keep falling in the west, and they are forecast to get another 6-8 inches this week. Temps will be really hot in Argentina over the next 10 days, reaching 100 degrees. Brazil will see mostly normal temps over the next week, in the 80’s-90’s. Argentina got some help with a few rains in the last 14 days and will need much more considering its going to be really hot.
Have a Safe Day!
Garry Gard
920-348-6844
January 18, 2021
NO Markets today as trade observes Martin Luther King day.
Have a Safe Day!
Garry Gard
920-348-6844
January 15, 2021
Good Morning,
For the first day this week the markets appear to be headed lower. Corn is down 3 and soybeans are down 12 to start the day. With a 3 day weekend on the horizon and funds holding a record long position we should expect some profit taking.
The US dollar has made a low over the past couple weeks awaiting whatever any new stimulus package may look like as the White House is in transition.
The weather forecast for South America is consistent with prior runs dropping some much needed rain in Argentina. Totals were be .25-1 inch over the next 48 hours, with most of it falling to the North. Western Brazil is going to see excessive rainfall where amounts will be up to 8 inches, causing flash flooding. Central Brazil will see scattered showers over the weekend. The important thing will be if Argentina has more rain in the forecast early next week.
The president of one of Brazil’s truck unions has warned in local media that upcoming strike action, scheduled for February 1, could be worse than in 2018 when national action over pay and conditions cut off essential supplies to major cities across the country.
The president of the National Association of Autonomous Transport (ANTB) Jose Roberto Stringasci was quoted in a number of Brazilian media outlets warning that the protest over rising diesel prices is gathering support and could be bigger than 2018.
With few major railways, Brazil is particularly reliant upon truck transportation to move goods around the country, with the previous truck strike quickly bringing the country to its knees.
This has lead to additional Chinese purchases of US soybeans as they have already been dealing with the delayed crop from South America due to weather.
Reminder there are no markets on Monday 1/18/21 as trade observes Martin Luther King Day.
Have a Safe Day!
Garry Gard
920-348-6844
