Markets opened softer this morning with corn down 1 and soybeans down 4 as traders wrap up trading for the year.
South American weather remains bearish the markets with very favorable weather over the last week and forecasts for decent precipitation in the 1-5 day forecast. With the lack of any weather concerns for South America and in most cases very favorable weather it will be hard to rally the market on weather.
Yesterday’s export inspections came in below the range of expectations with 409 mmt which is less than half the level seen last year. We are currently 17 weeks into the marketing year and we are 390 million bushel behind last year. The US continues to struggle with not being the most competitive corn on the market with Argentina and Ukrainian corn both less expensive after freight.
Vice Premier Liu He has accepted an invitation to lead a delegation to the US this Saturday where he is expected to sign the phase one deal that would significantly de-escalate the US-China trade war. This is positive news, but I think we need to realize that the damage that has been done over the 18 months is going to linger for years to come. During this trade war, we have invited Brazil, Argentina and Ukraine to the soybean production party and they will remain competitive going forward.
I would advise producers to put offers in with your buyers for old crop corn and soybeans before the January 10th Production and S&D report. I would target $3.99-$4.08 on the CH CBOT and $9.60-$9.85 on the SH CBOT. Looking back over the last 5 years we have struggled to trade above these levels.
I would like to thank all of you for business in 2019 and look forward to serving your grain marketing needs in 2020. May you and your family have a prosperous new year!