Last Weeks Close: March corn futures finished the week down 4 ¾ cents, trading in a 6 ½ cent range. Fridays Commitment of Traders report showed that funds piled back into their short position, selling 43,859 contracts which puts their net short at 198,920 contracts.
Fundamentals: We had great ethanol numbers on Wednesday and a good export sales read on Thursday but this only kept the market from falling out of bed. Overall exports are weaker, and the bulls need to see above expectation reads. If we see some of these weekly data points come in on the low end of expectations that could ignite another leg lower. Weather in South America has been less concerning than some were expecting/hoping for as rains work their way into forecasts. Planting estimates earlier in the week had Argentina pegged at 45% complete, this lags the average pace but is not worrisome at this point. Brazilian corn planting is said to be 45.3% complete which is nearly 6% ahead of last year’s pace.
Last Weeks Close: January soybeans finished the week down 22 ¼ cents, trading in a range of 25 cents. Fridays Commitment of Traders report showed that funds were in long liquidation mode (duh). Funds sold 42,430 contracts which puts their net long position at just 12,455.
Fundametnals: Rains in South America have worked their way into the forecasts which has evaporated some of the La Nina weather premium. Export sales data this week was on the low end of expectations, we have been hammering on the fact that the grain market needs to see a trend of beats to get this market going. Within expectations for corn, beans, and wheat just doesn’t get the job done. Yesterday’s NOPA (National Oilseed Processors Association) showed crush at 163.546 million bushels; this was a record for the month, above trade expectations of 163.191, and 2% above last year’s number for the same time. Soybean oil stocks were at 1.326 billion pounds, this was above expectations of 1.269 and up 8% from October. Informa updated their estimates for the US crop; they have yields at 49.7 bushels per acre and total production at 4.45 billion bushels.
Last weeks Close: March wheat finished the week up ½ of a cent, trading in a range of 8 ¼ cents. Fridays Commitment of Traders report showed funds were heavy sellers, adding 43,033 contracts to their position, putting them net short 165,412 contracts; the second largest on record.
Fundamentals: Export sales this week came in better than expectations which is a step in the right direction but far from bullish. The market needs to see a trend of better than expected exports to encourage short covering from funds. Bearish fundamentals will be hard to reverse at this time with ample global supplies and dismal demand keeping a lid on things. We were on RFD-TV last week saying that the only buying we have been recommending is short covering due to the lack of bullish fundamentals.
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