Market Update; Thursday, March 7th, 2019
Lack of trade resolution confirmation weighs on commodity markets.
Commodities are in the red today as fresh selling has been uncovered in the market. This selling is stemming from the lack of confirmation on trade resolution between the US and China. While we continue to hear rumors that trade differences are being settled, the lack of actual trade is becoming concerning. This has spilled into other products such as dairy, where December exports were down 20.2% from a year ago. This is mainly from a 52% decrease in Chinese imports. The market is taking light support from likely planting delays following the wettest winter on record for the Midwest, although this is quickly becoming old news.
Corn is struggling from a lack of fresh news more than anything else today. News that yearly Ukraine grain exports will be 5 million metric tons larger than a year ago is also pressuring corn values. Corn is taking support from a tight cash market across the US as deliveries are non-existent. In many regions of the interior market this has processors paying the equivalent of rail values to entice movement.
Soybeans have pared early losses today as fresh selling interest has subsided. Soybeans are also taking support from hopes we will see more interest in our offerings as China and Canada are now in a dispute that is hindering canola trade. China has prevented Canadian canola from being unloaded due to “hazardous pests” being found in vessels. The United States exported 77.7 million bu of soybeans in December, the least amount for that month since 2007.
Wheat futures are under solid pressure today as the entire complex struggles with negative news. The top of these is that global wheat values are declining and the US needs to follow in hopes of getting ANY export business. Russian wheat is dropping due to current exchange rates, and was down $1.00/mt yesterday. Paris milling wheat is now at its lowest level since July. Even with production issues in several regions of the world, this is enough to pressure the market.
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