Grains finished mixed with corn/wheat lower and soybeans higher. The outsides were mixed with crude oil lower and equities higher. The main reason for the spike in beans could have just been some unwinding of the long corn, short bean spreads.
The COT report shows the managed money net short beans and wheat, while corn is the one market they are still largely net long. If they liquidate it may be the price of corn that continues to suffer the most.
Weekly export sales report for grains from this morning:
Corn 400,000 – 600,000 MTs 506,900 MTs
Wheat 300,000 – 400,000 MTs 318,400 MTs
Soybeans 400,000 – 600,000 MTs 468,600 MTs
Today’s settlement in March corn was the lowest since March 2011, and we are just coming off the lowest January 12 bean settlement since October 2011! This is all happening as we are hitting the lowest level the Euro Currency has been since January. Obviously the currency moves have played a part in this just as the higher than "originally expected" supply is playing a part as well. With the world corn and wheat carryout going up on the last USDA report, market participants seem to be more comfortable lifting longs and going short. We still feel that there is considerable downside risk in these markets between now and that March timeframe when the Federal Crop Insurance price levels are set.
South American weather was slightly changed at midday with more favorable conditions for Argentina than originally projected. There are still areas of drying but for the most part Argentina and Brazil have favorable conditions for crop development at this time.
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Chart: March Corn
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