Market News- POET: Portland 01/08/20 11:26:01 AM
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|Weekly POET Grain Report|
Jan 8, 2020
- The big news overnight was obviously the Iranian missile attacks on two joint U.S.-Iraqi military bases. The attack didn’t kill or injure any Americans – and information has been surfacing that indicates the U.S/Iraqi forces were given a heads up (possibly a deliberate move to avoid a retaliatory strike by U.S. forces). Stock market futures initially opened substantially lower last night, with the DOW down more than 400 points and the S&P 500 down more than 40 points, however both have clawed their way back to unchanged/slightly positive territory throughout the early morning trade.
- CONAB (Brazil’s USDA equivalent) was out this morning, raising their bean crop projection by 1.1MMT to 122.2MMT and raising their corn projection slightly by .3MMT to 98.7MMT. For comparison, the USDA is at 123 and 101, respectively, however one has to keep in mind that CONAB is nearly always some degree lower than USDA estimates. Overall, these numbers are certainly not bullish with both crops getting bigger at this time.
- Trade estimates have finally been surfacing for the ever important Jan WASDE report to be released on Friday at 11:00 am CST. Corn yield is expected to decline by .8bpa to 166.2, while bean yield is expected to decline by .3 bpa to 46.6 bpa. Overall, the average trade estimate pegs 19/20 carryout at 1.757B bushels, down 153MM bushels from the November estimate. Beans carryout is expected to decline by 51MM bushels to 424MM bushels.
- Some additional disappointing news overnight from China – as they’ve suspended their national roll out of their ethanol mandate. This was supposed to result in a 10% blend of ethanol this year and a way to reduce their massive corn stockpiles (as well as increase air quality). Their stockpiles have declined fairly sharply without this mandate and now it is being suspended due to food safety concerns.
- March corn should find decent support in the $3.78-$3.80 range, which is the high volume POC as well as the 61.8% retracement of the recent move (from 12/11 lows). Initially upside resistance lies at $3.85 ¾ (yesterday’s high), with a close above $3.92 needed to really ignite bullish momentum.