This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Markets firmed up on Monday, and Wednesday’s early close was on low volume. Corn has managed three closes in a row above the 200-day moving average, which helps the charts look a bit more bullish. Soybeans have also eked out enough strength to put in support on the chart and start a bounce. It is too early to tell yet if that is just from low-volume holiday trade or the start of some strength. China continues to buy at a steady pace and is over halfway to reaching the 12 million metric ton goal the administration keeps touting, though this number has still never been confirmed by the Chinese side. The market just does not seem to care. This is an acknowledgment that even at 12 million metric tons of soybeans bought by China, USDA may have to lower exports on beans. USDA is still behind on releasing the commitment of traders reports from the shutdown, but on Wednesday we got current through 12/16.
Those reports have shown that the funds had a much bigger long
position after the deal with China was announced than many realized. They were still selling those positions as of the most recent report we got. USDA is going to speed up the pace of releases and get us caught up by the end of December now. USDA is still behind on weekly export sales as well. The one they released this week gets us through 12/11. Total sales commitments for corn through that period are now at a record high and up 31% from last year’s pace. Soybean export sales pace, though, is at a 14-year low. Near-daily Chinese purchases are starting to narrow that, but as the South American crop gets closer and closer to harvest, the window is rapidly closing. There is also no major weather threat in South America to get headlines and excite the bulls. Some private analysts are already raising Brazilian soybean production estimates to new records. The early planted acres will be harvested soon and have had good weather. But there was a big break in planting from a dry spell, so the early harvest will be over quickly, and then there will be a break before more harvest progress is made. There is still a lot of growing se
ason left for a weather issue, but no guarantee of one.
The market will continue watching South American weather and waiting on USDA’s January report, which is to be released on Jan. 12. That is a big report, since it is USDA’s “final” estimates of U.S. crop size. They will not make any more adjustments to the crop size after this report, just make adjustments on the demand side of the equation. USDA will also release the first stocks report of the new crop year on this report. Their analysts will have the benefit of the stocks data to help estimate crop size, but it will all be released to the market at the same time. USDA will also update their South American crop size estimates, but they have taken such a conservative approach the last few years those estimates are not nearly as important as they used to be.
Markets were closed yesterday for Christmas and did not trade
an overnight session, but opened at 9:30 a.m. Next week, markets will have a full trade day Dec. 31 but will not open on New Year’s Day for the day session or the night session. They will reopen at 9:30 a.m. Eastern Friday morning. I hope everyone had a wonderful Christmas.