This is the SFN Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.
As expected we saw very low volumes last week in the grain and oilseed markets through the holiday. Beans continue to be under selling pressure as there is currently no threats to the South American crop. The market is clearly not watching anything happening in the US right now as exports are very good. Weekly exports were reported on Friday due to the holiday and they were up 34% from the week before and 31% higher than the four week average. The total commitments were 92 million bushels for soybeans and 537,000 tons for meal for the week. We also saw a single flash sale on Friday for 33 million bushels! But the market dismissed it all and continued its slide lower. This is because the market expects many of these sales to be cancelled or switched if the South American crop continues to develop without any issues. The US balance sheet may tighten up a little, but the world balance sheet will get more burdensome if we make a big crop in South America. There is still a lot of growing season left though as weather will still matter down there until March.
Corn has managed to hang on to support levels and actually saw some buying on Friday to undo a lot of the weekly market losses. Exports last week were the lowest in 9 weeks. First notice day was Friday for December contracts so all basis contracts that were not priced have been rolled now. December corn traded lower most of the week last week then popped on Friday which was first notice day. Seems to fit the pattern of farmers throwing in the towel and pricing basis contracts rather than rolling. Now that is behind us it will be a while until people are forced to price at the same time. Corn balance sheet looks better than beans in the US and world. Slowdown in exports is a little concerning since it is happening at the same time the dollar is rallying. Market will be watching to see if that slowdown continues or was a one off. Ethanol demand remains very strong. We have set two weekly records in the past three weeks. Commitment of traders report was delayed by the holiday and came out Monday evening after this recording was made. I will be interested to see if the funds are continuing to add to their long position or selling.
Markets will continue to watch mostly South American weather and geopolitical events. We do not have a meaningful USDA report in December as very few changes are made on the monthly WASDE report that comes out on December 10th. Look for more range bound trade and dwindling volumes as we approach Christmas. The big reports will come out Friday Jan 10th at 12 noon eastern.