Post Market Wrap Up March 5
March 5, 2019
Post Market Wrap Up March 14
March 14, 2019

Post Market Wrap Up March 12

Headlines:

Oil gains on cuts to Saudi, Venezuelan exports

Oil prices rose on Tuesday, supported by signs of tightening global supply after a Saudi official said the kingdom plans to cut oil exports in April, while a power outage in Venezuela reduced crude exports from the country. Saudi Arabia, seeking to drain a supply glut and support prices, plans to cut its crude oil exports next month to below 7 million barrels per day (bpd), while keeping its output well below 10 million bpd, a Saudi official said on Monday. Crude has been supported since the Organization of the Petroleum Exporting Countries and its allies, including Russia, returned to supply cuts as of Jan. 1. The group, known as OPEC+, agreed to reduce supply by 1.2 million bpd for six months.

Export inspections for corn fell week-to-week while examinations of soybeans and wheat increased

Export inspections for corn fell week-to-week while examinations of soybeans and wheat increased, according to the USDA. Corn assessments fell to 765,618 metric tons in the seven days that ended on March 7, the USDA said in a report. That’s down from 865,617 tons the previous week and 1.38 million tons in the same week in 2018. Soybean inspections, however, rose to 874,363 metric tons from 848,357 tons the prior week and 930,222 a year earlier, government data show. Wheat examinations jumped to 592,001 metric tons, up from 488,829 tons, the USDA said. A year earlier, the agency inspected 428,815 tons for overseas delivery. Inspections of corn since the start of the marketing year on Sept. 1 are at 26.6 million metric tons, still well ahead of the year-earlier pace of 20.4 million tons, the government said. Soybean assessments at 26.8 million tons, however, are still well below last year’s pace of 39.7 million tons. Wheat inspections since the start of the grain’s marketing year on June 1 are at 17.6 million tons, just behind the year-earlier total at this time of 18.7 million tons, according to the USDA.

A trade deal between the US and China may be on the horizon with rumors swirling today.

Summary:

There were multiple reasons for a strong short covering rally today in the grains. The funds are close to being historically short in corn, there is slow farmer-selling, positive US/China trade talks and a weaker US dollar. All of these stand to help make the US commodities more competitive with exports in the future. We are looking for Corn prices to put in a major low in the middle of March much like they did in 2016 (or possible closer to the Spring solstice). Looking back to the latter part of March of 2016 was the last time funds were short as much as they are now. The timing and the actual price level is very close to where we were at in 2016. Markets started off slowly but ended up in positive territory by the end of the day. Corn was up 3.50 cents, Soybean gained 6.75 cents and Wheat appears to have hit our time cycle calling for a low. Wheat gained 23.75 cents on the day.