Weekly Market Wrap-Up
Grain Market Commentary
Friday, April 14, 2017
by David Gleason, Associate Merchandiser
Grains rallied this week as traders feel the bearish news has exhausted itself for the time being. The April WASDE was out on Tuesday. Oil continues its charge amid political uncertainty. Any disruption to the supply chain will help oil rally, and US shale production will ramp up to lessen the supply disruption. The next few weeks planting will start to really ramp up in the US, and it will be important to see good planting progress on corn acres.
December corn opened the week at $3.85 and traded higher all week to close at $3.94 ½. Corn traded through the 100 and 50 day moving averages. Corn looks poised to take a run at recent highs with planted acres still not being in the ground. The US carryout was unchanged on Tuesday’s report as we saw ethanol taken up 50 million bushels as feed was reduced by 50 million bushels. The South American corn crop was taken up. We saw Brazil go from 91.5 mmt in Mar to 93.5 mmt in Apr. The Argentinian crop was taken from 37.5 mmt in Mar to 38.5 mmt in Apr. As corn rallies we view this as a selling opportunity as stocks remain burdensome and acres for the upcoming crop year should be ample.
November soybeans rallied 10 ½ cents on the week to close at $9.61 ¾. Beans found a bottom after the USDA finally printed what many traders believe is the peak of bearish estimates from South America. Brazilian beans were estimated to be 111 mmt and Argentinian beans were estimated to be 56 mmt. Beans are firmly below all major moving averages and look to run into resistance on the way up at $9.80. With stocks already comfortable and bean acres being historically large we will see the carryout grow again next year without a serious weather issue.