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Karl Setzer Grain Commentary

Morning Comments; Monday, December 10th, 2018

Grains are trading lower on the overnight session.

The wait and see game for Chinese purchases continues as no action has been seen since the meeting last weekend at the G20 summit. The trade believes China plans to buy about 180 million bushels to replenish reserves. Purchases for immediate shipment is what the trade is looking and would have a positive impact for soybean prices. However, if they buy as a Memorandum of Understanding, that means they agree to buy an agreed to quantity over the next year. This would be disappointing to traders.

For corn, the export picture remains positive as Mexico and Japan continue to be the U.S. most regular and strongest customers. Current weekly corn export sales are running ahead of the 35.8 million bushels needed to meet the USDA’s projection.

The acreage debate between corn versus soybean will be a major topic for the trade until the March 31st report. The drop in soybean prices caused by the trade war have led many to believe the U.S. would see a significant shift to corn. As it stands today, soybeans have a better return over variable costs. A slower than normal fall season of fertilizer application and lack of tillage completed, corn may not be the best choices for acres in the Western Corn Belt.

Market movers: Continued reaction to Chinese trade negotiations.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.


 

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