US$ 98.58 up 136 for the week
Just another negative factor mostly for wheat and corn
March corn futures ended the week 2 cents higher at 383 woo-ho. This would have been a nice place to build higher from but just the opposite this morning trading 3-4 cents lower and knocking on the low end of the longer-term trading range. Tomorrow USDA will release the monthly supply/demand report and I see estimates are all over the place. So, what I do know is that we really need to chip away at corn supply numbers first and foremost. Of course, that can be done with increased usage and increased export sales. The other thing that would help is the lowering of old crop production numbers which were supposed to be finalized last month but USDS felt the need to resurvey some northern states due to corn standing in the field. My opinion is that two things can happen, and both would be negative to new crop December 2020 corn futures. You see if old crop numbers get some kind of boost it only projects more acres to be planted this spring and if old crop numbers get no boost the prices of March futures will fall through support at 375 and remain totally negative. Call for pre-report ideas.
Soybean futures gained 10 cents last week ending the March futures at 882. This is not the worst of numbers and as stated here last week the market will not go to zero. This morning the market avoided crashing below last week’s low avoiding the support number at 874. Now it will be the job of the bullish traders to get the market up above 878 and stay there. The report tomorrow is strewn with estimates and projections. I have seen stock numbers as low as 320mb which would blow the futures higher, but the more realistic estimate is 445mb which would not be the worst. Two things to consider prior to tomorrow’s report are that USDA says it will not estimate increase China purchases due to the phase 1 agreement yet and that even though the Chinese lunar new year holiday is over thoughts are that purchases will be slow due to the coronavirus problem Of course those are both negative to the futures trade so should the report somehow negate those factors the market would turn higher. That would be nice.
April live cattle lost 175 last week so the lower trend continues and again this morning probing over 100 lower. The story is that there is too much uncertainty on too many levels and the packer begins to lick his lips in anticipation of increasing his margin or at least protecting what he has. Uncertainty begins with meat demand due to movement around the world. Next is the uncertainty of the cutout values which continue to suffer loses. You guessed it; this leads to a lower cash trade. The cash trade was mostly a dollar lower for the second week in a row which of course cannot be described as falling out of bed but certainly not positive. I see that several analysts are saying that we can recover before heading to our summertime lows and I will agree.
March milk futures lost nearly 40 cents last week and ended in the 1740 area. The USDA weekly summary goes kind of like this. Butter production is very active, cream supply is heavy, demand is expected to grow heading into the spring season needs. Also mentioned is that farm milk outputs are steady to higher. To me you have two contradicting statements but what do I know?
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