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Corn Market As Close To Death As 1985, Analyst Says
DES MOINES, Iowa -- On Wednesday, the CME Group’s ag markets have attracted the buyers, with soybeans leading the way.
Investors are positioning themselves ahead of the holiday-shortened trading week. But, the trading range in the corn market is drastically narrow, moving less than a penny in the last two sessions.
At the close, the December corn futures finished 1/4¢ higher at $3.45. March futures ended 3/4¢ higher at $3.57.
January soybean futures closed 8 1/4¢ higher at $9.97. March soybean futures settled 8 1/4¢ higher at $10.08.
March wheat futures closed 1/2¢ lower at $4.40 3/4.
January soy meal futures finished $6.30 per short ton higher at $326.70. January soy oil futures closed 0.12¢ lower at 34.20¢ per pound.
In the outside markets, the Brent crude oil market is $0.15 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 64 points lower.
Deanna Hawthorne-Lahre, StatFutures co-founder and trader, says that the markets have ramped way down.
“But soybeans remain stiff after what I consider friendly comments about imports by the Chinese during President Trump's trip. The markets remain in the trading ranges, as they have for months, with bean fundamentals being the most constructive,” she says.
Hawthorne-Lahre adds, “Statistically, the corn market is as close to death as I've seen a market since 1985. Wheat is on life support, and we wait to see the numbers from the seedings report in January.”
Bob Linneman, Kluis Commodities grain broker, says investors are watching the performances of different commodities for price trends.
"Corn bears have a close eye on soybean prices. If soybean futures break out to new highs, then it would make sense to see momentum buyers jump in on the long side of corn. The bears need to keep prices under $3.52," Linneman stated in a daily letter to customers.
The CME Group’s holiday trading schedule has been released. Today, the markets close at the regular time of 1:20 p.m.
On Thursday, the farm markets will close for Thanksgiving.
On Friday, the CME Group’s ag markets open at 8:30 a.m., and close at 12:05 p.m.
Sunday’s overnight markets will open at 7:00 p.m., and regular schedules resume.
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s corn market’s trading range was less than a penny, while the soybean market’s range was not much different.
At the close, the December corn futures finished steady at $3.45. March futures finished ¼¢ lower at $3.56.
January soybean futures finished 1¢ lower at $9.89. March soybean futures closed 1¢ lower at $10.00.
March wheat futures settled 2¾¢ higher at $4.41¼.
December soy meal futures settled $1.50 per short ton lower at $318.30. December soy oil futures closed 0.22¢ higher at 34.17¢ per pound.
In the outside markets, the Brent crude oil market is $0.22 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 165 points higher.
Dustin Johnson, AgYield’s senior strategist, says that the wheat and corn markets have been especially inverse as of late.
“It’s as if the funds can’t help but spread one against the other. The market is coming up on First Notice day on the 30th; corn markets have been especially weak due to the contractual selling that often comes into those expiration periods,” Johnson says.
He adds, “The December corn futures contract is highly traded, from what we hear, so the market may find some additional farmer pressure starting early next week.”
Slow holiday movement may be why the last few days have been supported, he says.
Sal Gilbertie, Teucrium Trading, says that the ag markets are seeing quiet holiday activity with trade and funds largely on the sidelines except to square up commitments and weak speculative positions.
“The belief by many traders that the Thanksgiving holiday is a time of strength for many markets could lead to some short covering of the large open short positions in the grain markets, most especially because we are in the midst of the seasonal harvest low in corn prices and because there is very little likelihood of any significant new news to support large bearish positions from this point forward into the off-season,” Gilbertie says.
The USDA announced fresh soybean exports Tuesday.
Private exporters reported to the U.S. Department of Agriculture export sales of 130,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year.
The marketing year for soybeans began September 1.
Monday’s Grain Markets Review
On Monday, the CME Group’s farm markets finished mostly lower.
At the close, the December corn futures finished 2¢ higher at $3.45. March futures closed 1½¢ higher at $3.56½.
January soybean futures closed ½¢ lower at $9.90. March soybean futures finished ¼¢ lower at $10.01.
December wheat futures closed 5¼¢ lower at $4.22.
December soy meal futures finished $1.60 per short ton higher at $319.80. December soy oil futures closed 0.49¢ lower at 33.95¢ per pound.
In the outside markets, the Brent crude oil market is $0.32 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 82 points higher.
Jack Scoville, The PRICE Futures Group’s senior market analyst, says that the corn and soybean markets should rally this week.
“Wheat I am not so sure. But there are record short speculative position and corn and a big one, although not quite a record, in wheat – and this is helping. Seasonally, the old saw is to buy Thanksgiving and sell Christmas. We are in the zone for the first part now,” Scoville says.
Export inspections Monday were decent for wheat and soybeans and off but still decent in corn, he says.
“The lower crude and higher U.S. dollar are the primary negatives. Investors want to own this market, right now,” Scoville says.