Market Update; Tuesday, March 5th, 2019
Commodities drift sideways in lethargic trade.
Trade is mixed this morning with the grains showing some strength while soybeans are in negative territory. Technical indicators are the primary reason for this action as contracts continue to bounce between resistance and support. We are also starting to see elevated positioning for Friday’s WASDE report. Typically, this release receives little attention, but given the recent lack of fresh news, this year may be different. This lack of fresh news is keeping pressure on all contracts this morning.
Corn is drifting sideways today with little real interest being shown in the complex. Corn values are stuck in a range between the 100-day moving average on the topside and contract lows on the bottom. We are seeing larger crop estimates out of Brazil following recent weather improvements which is weighing on the complex. Corn losses are being limited by the slow start to planting in Southern States and how these will likely carry into the Corn Belt as well.
Soybeans are the weak commodity today as buyers are non-existent in the complex. On the positive side, soybeans are finding support from news a canola cargo from Canada has been blocked from entry into China due to trade issues. This could open the door for additional US business. Transit issues in Brazil are also raising hopes of more US exports. These stories are being countered by the likelihood some of the sales the US has on the books will roll to South America given weak basis values in those sources. Year to date crush in the US is down 8% from a year ago which is also concerning in the complex. Soybeans have held technical support though, which is limiting losses.
Wheat is struggling from a lack of interest today, but so far, is holding close to unchanged. Global wheat stocks are the primary negative factor for the market, as the EU is showing inventory that is 9.4% greater than last year. Australian officials are also claiming that while this year’s crop is going to be less than average, it will still be 6 million metric tons larger than a year ago. Several wheat sales were made overnight, and while the majority were optional origin, at least a few should be sourced from the US.
This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 517.541.1449, extension 411, or at ksetzer@citizenselevator.com