Weekly Market Wrap-Up
Grain Market Commentary
Friday, July 14, 2017
by David Gleason, Associate Merchandiser
Grains traded lower on the week after the latest WASDE report alongside a less threatening extended forecast. Oil rallied this week on oversold conditions. The dollar is trading lower this week which is needed to help spur exports out of the US. Corruption charges were brought against the ex-president of Brazil which has caused the Real to rally.
December corn opened the week at $4.10 and closed the week out at $3.89 ½. The selloff is largely attributed to a less threatening forecast, but the trade also saw the WASDE numbers which were indicating a carryout of 2.3 billion bushels for the 17/18 crop year. This was based off of a 170.7-bushel national yield which I feel is a lofty expectation right now. The carryout will likely trend back towards 2 billion bushels going forward. Dec corn closed in between the 100 and 200 day moving averages. Weather over the next couple weeks will set the course for corn. If we get back up north of $4.00 it will be key to extend sales for new crop as the carryout looks to be ample.
November beans opened the week at $10.25 ¾ before trading lower to close the week out at $10.01 ½. Beans had a nice reversal today bouncing off of the 200 day moving average. The funds are showing that they aren’t comfortable staying short until more is known about August weather. The WASDE printed a 460-bushel carryout for next year with the yield assumption right at 48 bushels per acre. This seems reasonable for now until we know more about weather in August. Beans are very sensitive to any yield hits and therefore can fluctuate significantly. Using a min/max is a great way to look to protect your downside while still leaving potential for upward movement.