Is this the pause that refreshes? No, I am not referring to a cola that I am about ready to consume, but rather this somewhat sedate and slightly supportive grain/soy markets that we are experiencing this morning. No escalating blood pressure induced action, no additional threats of tariffs, just your normal buying and selling as you would expect to see in the course of a day in the commodity world. After all, that is what we are ultimately here for. To enable the actual (physical) buyers and sellers to come together to exchange goods with each other in an open and competitive market. Of course, as we know all too well, time and again there are those “extraneous” factors that breed uncertainty and volatility, sometimes provided by mother nature but too often provoked by man.
For we here in the Northern Hemisphere, this is also the Summer Solstice, the day when we are supposed to celebrate the most hours of sunlight during the year. Here in Northern Illinois, we have yet to see any actual sunlight and according to the forecast, probably will not. Market legend, W.D. Gann believed that it was around the four celestial events during the year, roughly March 20th/22nd, June 20th/22nd, September 20th/22nd and December 20th/22nd, that you should be on the lookout for trend reversals. Not that I am professing this as a trading strategy, but if you look at the action in soybeans for the past year, and had you just reversed positions around that time each quarter, you would be sitting on gains of around $3.10. Certainly, one could have done much worse. I did the same exercise in corn, and you would be staring at a gain of around .70 cents but do recognize in each case, you would have sat through periods of loss (margin calls) that may have tested your patience, not to mention pocketbook. Are we at this time sitting on the cusp of a trend reversal? While I cannot provide the definitive answer, considering how oversold these markets are and that we have pushed sharply lower into a number of solid cycle counts, I believe we should be in store for at least a decent corrective bounce in July.
It is Thursday which means weekly export sales, but I am afraid they have provided little to cheer about. Actually, wheat was the standout this week as we sold 461,600 MT or 16.96 million bushels. Top purchasers were the Philippines with 137,000 MT, followed by Japan taking 118,500 MT and then Thailand with 49.6k. Corn sales were a wreck as we only sold 165,900 MT or 6.5 million bushels. This was 82% below last week and the 4-week average. Top purchasers were Mexico at 214.8k, Japan at 142.6k and Peru with 108k. Unknown destinations canceled 584,700 MT. There were sales of 339,700 MT for the 2018/19 crop year. Beans sales were nearly as uninspired coming through at 301,700 MT or 11.08 million bushels. This was 42% below last week but actually 48% above the 4-week average. The Netherlands were the top buyer with 240.3k MT, followed by Vietnam taking 82.3k and Saudi Arabi with 65.9k. Unknown destinations canceled 204.3k and China another 66k. There were sales of 227,600 MT for 2018/19.
Beans and products continue to struggle just a bit today but still remain well within the ranges already posted this week. Ideally, we will see prices stabilize now through the end of the month.