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269467

3 Big Things, March 19, 2018

Funds add to bullish bets in corn and soybeans.

DES MOINES, Iowa -- As the end of March approaches, farmers lean heavily on every updated planting weather forecast while watching for price rallies.

Rain is falling in the parts of the world that need it, but the moisture is few and far between.

In overnight trading, the May corn futures are 4¼¢ lower at $3.78; July futures are 4¾¢ lower at $3.86. May soybean futures are 13¼¢ lower at $10.36; July soybean futures are 13¼¢ lower at $10.47. May wheat futures are 8¼¢ lower at $4.59. In the outside markets, the NYMEX crude oil market is 23¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are seen mixed.

On Monday, the macroeconomic factors will be hard to find, with no notable events scheduled. However, the Federal Reserve will hold its two-day monetary policy meeting on Tuesday and Wednesday. Following that meeting, it’s expected that the Fed will announce an interest rate hike, revise its economic outlook, and release a fresh forecast for interest rates.

Also Wednesday, new Fed Chair Jerome Powell will hold his first press postmeeting conference.

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Funds Go Long Corn, Soybeans

This week’s grain market could be a reflection of weather and or the funds’ position highlighted in Friday’s Commitments of Traders Report. The funds bought a lot more contracts in the corn and soybean markets and approach a record bullish betting position in soybeans.

The COT Report noted that funds are now long the corn market with 233,000 contracts. The funds are holding 208,000 long contracts in soybeans. For wheat, the funds are short that market by 6,000 contracts.

The question for this week is whether the outside investors continue to get long the corn market. Keep in mind, the USDA March Prospective Plantings Report will be released in less than 10 days. Funds are expected to be positioning themselves ahead of that report.
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More Rain Needed For Everyone

The grain markets continue to eye crop weather in the U.S. Wheat Belt and in South America.

Over the weekend, some rain fell in the hard-hit soybean areas of Argentina. Although not enough moisture was felt to turn that country’s soybean crop around, the psychology of the market sees the light rain as bearish.

The weather models are showing measured rainfall for Argentina in the next 10 days to two weeks, according to WxRisk.com.

In the U.S., the weekend weather was mild. Some rain fell in the Kansas wheat region, proving negative to Sunday night’s markets. The western Wheat Belt has received more rain for its crop than the eastern side. The wheat in the center of the Wheat Belt is mixed on received rainfall. The story for the U.S. winter wheat crop cannot be written just yet.

Going forward, rain is expected Tuesday and Wednesday in the Delta and up the east U.S. coast. Also, a system will bring rain and snow across the northern Corn Belt, this week, with significant accumulations of snow and measured rainfall as the system works into the eastern Corn Belt.

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