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Market Commentary for 5/19/23
Selling Pressure on the Market Continued This Week
- Old Crop Corn – down around 30 cents
- New Crop Corn – down nearly 10 cents
- Old Crop Beans – down around 80 cents
- New Crop Beans – down nearly 50 cents
China Cancellations
China’s corn cancellations earlier this week did not help the corn market. So, now the market is trying to figure out if there will be more.
South America
There are suggestions circulating of possible limited port capacity in Brazil due to a very large bean and sugar crop that needs to be exported first. With those crops being worth more per ton than corn it could mean less space available in the summer to load corn than the trade is currently expecting.
Weather
Most of the corn belt is experiencing good weather conditions. Therefore, the market is growing less concerned of any potential weather issues severely impacting yields. A change in forecasts could change market direction in a hurry.
Black Sea
The Black Sea export corridor was extended again. At this point it may not impact the market much anymore as it is believed that Ukraine is nearly out of old crop corn. While the threat of closure remains a possibility in the future, it is seeming less and less likely to occur.
Debt Ceiling
Despite positive comments on Thursday by both sides of the political isle that a deal could be made, debt ceiling negotiations broke down on Friday. The threat of the US not paying its debts would be catastrophic to the economy and makes some traders want to be sellers instead of buyers. While it seems most likely a deal will eventually be made, the market will be on edge until it happens.
Bottomline:
A spark is needed for the current downward market trend to turnaround. Unfortunately, it is difficult to know what that will be or when it might occur.
Want to read more by Jon Scheve? Check out recent articles:
The Market Will Now Focus On The Weather
Will December Corn Futures Go To $4 Or $8?
Can Corn Rally Back? Plus How to Add 30 Cents to Some Corn Sales
Spreads And Basis Suggest Old Crop Corn Futures Values May Be Too Low
Jon Scheve
Superior Feed Ingredients, LLC
