Grain Exchange 2-18-20

Going into the markets three-day weekend the corn market continued its 3.76-3.85 range with funds short 72k contracts of con vs 56k the week prior.  Technically the corn complex had appeared to be over sold and wanting to build back up in the range but have seemed to be stuck in this area for the month of Feb still trading below the 20-day moving average.  The optimists among us want to point out that the fear of a slowing China or even World economy could subside with Coronavirus announcements slowing in China while they also approve imports of live poultry from the US for the first time since 2015.  With Phase 1 going into effect the market is on the cusp of understanding what we are in for going forward.   Will China honor their purchase intentions?  China says, yes but had just purchased Ukraine corn.

As we move to beans there also seems to be some sense of optimism as price is moving above the 20-day moving average suggesting we will continue to bounce off the bottom of the range.   South America has not been a source of bullish support as crop conditions are not alarming and the currency dynamics push both corn and beans into the World market.   Managed money was a net seller of all 3 portions of the soybean complex last week, but cash bean markets are firming, and spreads are starting to firm up which is supportive of futures.

It is that time of year when we are all working on marketing plans.  How do we sell this crop we have not yet planted but fully intend too?  One thing we are being told is, do not count on additional “Trump Bucks” for next year.  With that information and looking at the economics of grain farming next year things do not look easy.   Corn might be attractive as opposed to beans, but both will take some strict and careful management to make things work and that is why planning this time of year is so important.

Josh Grunnet