Grains and oilseeds are mostly higher on Tuesday following the overnight session. The U.S. dollar is up slightly after rebounding higher to start the week. Crush oil is moderately higher following yesterday’s sharp losses. Stock futures are mixed.
CORN
March corn traded lower for a second session on Monday, losing 2.50 cents to close at $4.25 ¾. Prices are likely to consolidate this week below last week’s high around $4.34.
More bullish news that offers a material change to the U.S. balance sheet may be needed to push corn back into its old range above $4.35. Yesterday, we released an analysis on corn exports, arguing that the USDA has room to increase the corn export forecast. However, any increase could be offset by declines in feed/residual usage.
U.S. corn crushings for ethanol totaled 488.3 million bushels in December, up 1.8 percent year-over-year. That was the highest monthly volume since December 2017, which was a record. Year-to-date crushings for the marketing year reached 1.865 billion bushels, up 0.7 percent from a year ago.
SOYBEANS
Soybean futures closed 4 cents lower on Monday at $10.60 ¼ a bushel, though prices fought off their lows from the day. Positive momentum continued overnight, with futures pushing back above mid-range.
Soybean oil futures surged overnight after President Donald Trump unexpectedly announced a trade deal with India yesterday. There is no breakdown of what products could see the most benefit, but India has been known to import U.S. soy oil.
U.S. oilseed processors crushed 230 million bushels of soybeans in December, up 5.5 percent year-over-year. Year-to-date crushings for the marketing year reached 892.5 million bushels, sitting 7.5 percent higher than the previous season.
StoneX raised its Brazilian soybean production forecast to 181.62 MMT, up from the previous estimate of 177.61 MMT. The harvest outlook remains positive despite some areas showing variability.
WHEAT
March Chicago wheat fell sharply on Monday, losing 10.25 cents to close at $5.27 ¾ a bushel. Prices slipped back below the 100-day moving average after containing the selling last week.
Hedging pressure likely pressured prices after hitting a two-month high last week. Large global supplies are a known fundamental for the market, so traders may be looking for the next piece of news that the market can perceive as a bullish factor.
Winter wheat conditions improved slightly in Kansas over the past month. The USDA estimates that 61 percent of the crop is in good-to-excellent condition, up one percent from January. Meanwhile, ratings declined in Oklahoma, Texas, Montana, Nebraska, and South Dakota.
Warmer temperatures are expected to spread across the Plains and remain over the next two weeks.
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PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE RESULTS. FUTURES TRADING INVOLVES SUBSTANTIAL RISK AND IS NOT SUITABLE FOR ALL INVESTORS.