Grains markets ended higher on Thursday.
Dave Chatterton, Strategic Farm Marketing, says it was a technical bounce as corn and soybean markets were oversold after hitting 3 1/2 year lows.
“There were also rumors that China was stepping in for some U.S. corn that follows their first purchase of U.S. soybeans earlier in the week. So, hopefully there is some fire to that smoke. We haven’t had confirmation of that yet but it did help hold the corn market up.”
However, he says the higher day was also positioning ahead of USDA’s data dump.
The market participants have been leaning bearish heading into the report on ideas USDA will need to increase ending stocks of old crop corn, wheat and soybeans after finding additional inventory in the Quarterly Stocks Report.
Plus, the new crop corn balance sheet will need to work in another 1.4 million more acres of corn.
“There’s no indication we’re going to get any bullish news from the USDA report,” he says.
Rain in the Eastern Corn Belt this week had funds hammering the short side of the grain market with ideas of trend line yield and there may be more downside potential.
“After the report we go back to trading weather and yield potential and without a big production threat or improved demand which is going to probably have to come from China, it may be a tough to rally the market,” he says.
