|Day's Range||1,009.25 - 1,034.25|
Grain prices tumbled early Friday following news that China has prepared a list of products which include grains that they plan on adding tariffs. This would make U.S. corn less attractive to Chinese buyers which would reduce demand and weigh on prices. The threat of a trade war with China has weighed on agricultural markets in recent days, with soybean farmers and others relying on exports to China. Corn prices broke down through trend line support forming a bear flag pattern and then continued to slide on Friday.
Grain prices were mixed in early North American trade on Friday. While prices of Wheat were lower, corn was stable and soybean moved higher. The most recent crush report from the National Oilseed Processing Association shows that demand for soybean meal continues to rise, buoying the price of soybeans.Corn Prices
Hedge fund significantly added to their long position in futures and options according to the most recent commitment of trader’s report released for the date ending March 6, 2018. According to the CFTC, managed money added 64K contracts to long position in futures and options while reducing short position in futures and options by 40K contracts. The 104K contract change in corn positions has placed the open interest in corn futures and options at 349K long versus 186K short in the managed money category.
Grain prices were on Friday in North American trade, following a mixed WASDA report from the U.S. Department of Agriculture. The report was bullish for corn prices which settled on the highs of the session on Thursday, and somewhat bearish for soybeans which settled closer to the lows of the session on Thursday. Corn prices moved lower in early North American trade on Monday declining for the second consecutive session. Prices are forming a bull flag pattern which is a pause that refreshes higher.
Grain prices moved higher in the past week lead by soybean futures which closed higher on a weekly basis for the fourth time in the past five weeks. Soybean prices for March and May delivery increased 3.9%, per bushel. Export activity slipped, falling 14% to 640 TMT for the 2017/18 season and was 13% below the prior 4-week average of 740 TMT. Total export commitments are 78% of projections with 29 weeks to go and need to average 425 TMT in weekly sales to meet forecast. Current export sales are 13% behind last year’s pace.Corn Prices
Grain prices continued to move higher on Friday in early North American trade. Soybean prices are in the process of breaking out while corn and wheat are still facing stiff resistance. Soybean oil stocks are at the high end of the range for this time of year. NOPA released reported a January crush of 163.1 million bushels, which was 2.4 million bushels below market expectations and 1.2 million bushels below estimate. The total was below the lower end of the range of market expectations but was still the largest monthly total for January and the eighth largest monthly total of all time.
Grain prices continued to move higher on Thursday in early North American trade. Soybean prices are in the process of breaking out while corn and wheat are still facing stiff resistance. Soybean oil stocks are at the high end of the range for this time of year and will end January at 1.7 billion pounds with an average of 1.6 billion pounds.
Grain prices moved higher on Monday and continued to consolidate at elevated levels on Tuesday. The CFTC reported that money managers cut their net short position in nearly all grains which led to a further short squeeze higher. Concerns about dry weather in Argentina and the southern Plains helped spark the change, though a recent USDA report suggested to some that ample domestic supplies of wheat and soybeans would continue to weigh on prices. Corn prices closed on their highs Monday and are poised to test resistance.
Grain prices gained some traction on Monday following reports on Friday from the CFTC that said that hedge funds slashed their bets that soybean prices and corn. The CFTC reported that money managers cut their net short position in soybean futures and options by over 50% to a little under 10,000 contracts as of Tuesday February 6, 2018. China’s corn imports are expected to be higher this season due to a rising pip population and a reduction in sorghum following the government’s decision to investigate imports, says the China Ministry of Agriculture.
Soybeans were trading under pressure following the USDA’s report that showed a likely increase in ending stocks due to a decrease in exports for the balance of the 2017/2018 season. The USDA raised its 2017/18 US soybean carryout forecast by 60 million bushels to 530 million its monthly supply and demand projections. The increase in USDA’s carryout was larger than market expectations, which projected an increase of just 16 million bushels.
If the average is realized, it would represent a 16-million-bushel increase from USDA’s January projection of 470 million bushels. The anticipated increase in US ending stocks is likely being driven by a reduction in USDA’s projection of 2017/18 US soybean exports. USDA’s January projection of 2.16 billion bushels was reduced 65 million bushels from its December forecast, but slower-than-expected exports over the last month could push an additional reduction in its export forecast.
Grain prices initially moved lower but rebounded as the dollar gained back some of its gains. The latest USDA soybean export inspections came in ahead of analyst expectations, providing some relief after a weak open to the trading week, with corn about in-line and wheat shy of the average forecast. The 1.3M tons of beans was well ahead of even the most bullish forecast and helped halve earlier losses.Corn Prices
Grain prices continued to drop in early North American trade on Monday as risk of perpetuated throughout the market. Equity prices are tumbling, and the dollar is gaining traction weighing on grain prices. Hedge funds continue to reverse short positions in futures and options, which was likely the catalyst for the rise.
Grain prices edged lower in early North American trade on Friday. Corn prices are now consolidated and forming a bull flag pattern which is a pause that eventually refreshes higher. Corn is hovering near the 50% Fibonacci retracement level that comes from the drop from the highs last July near 3.93, to the lows seen in September near 3.28, which comes in near 3.61. Prices could retrace back to their breakout level which is a downward sloping trend line which was former resistance that is now support near 3.55 per bushel.
By Tom Polansek and Rod Nickel CHICAGO/CALGARY, Alberta (Reuters) - Top U.S. grain merchant Archer Daniels Midland Co has proposed a takeover of Bunge Ltd , according to a person familiar with the approach, which could set up a bidding war with Swiss-based rival Glencore Plc . Thin margins have squeezed core commodity trading operations, including those of ADM, Bunge, Cargill Inc [CARG.UL] and Louis Dreyfus Co [AKIRAU.UL], which together are known as the "ABCDs" and dominate the industry. Glencore last year sought a tie-up with Bunge in what was viewed as a start of a wave of mergers and acquisitions in the industry.
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World ending stocks of total grains - the leftover supplies before a new harvest - have climbed for four straight years and are poised to reach a record 638 million tonnes in 2016/17, according to USDA data. Another key factor: China - the world's second-biggest corn grower - adopted stockpiling policies a decade ago when crop supplies ran thin, resulting in greater production than the world needs. "I think the norm is where we are now," said Bryan Agbabian, director of agriculture equities at Allianz Global Investors.
Hike in crude oil price raises cost of producing agricultural products and results in higher food prices and vice versa. Also, use of biofuel will boost demand for feedstock like corn and sugar.