Weekly Market Wrap-Up
Grain Market Commentary
Friday, April 13, 2018
by Darren Cudaback, Senior Account Representative
The commodities were involved in the remanence of last week’s tariff talk along with USDA report news and export news this week. The talk of a trade war between China & Russia has died down. Some predict this is simply “sabre rattling” that will not actually have any change in tariff agreements. Time will tell. Oil market hitting new highs this week is typically a good sign for other commodities as well. President Trump stated Thursday he would like to see year-round sales of E15 gasoline, which is great news for corn producers, but oil refineries say that requiring them to add biofuels is too expensive and displaces the oil products. The EPA currently doesn’t let E15 be produced in the summer months due to the smog it produces during the warmer months.
December corn opened the week at 4.1325 and closed at 4.1075. Not much movement involved this week considering what we witnessed in the last two weeks. Tuesday the USDA reported the ending stocks to be 2.182 billion bushels for the 2017-18 crop year. That number was higher than the March reported number of 2.127, but within the trade range estimates. The reaction was limited and small. The corn fund position is coming off of the high it had two weeks ago. The funds have sold around 90,000 contracts in the last two weeks, but still remain in a positive overall position at 140,000 contracts. This provides a good level for the corn producer to make more sells.
November beans opened the week at $10.3775 and closed the week out at $10.495 closing up .1175 cents. The USDA report on Tuesday put the soybean market in a little stronger position by taking the ending stocks down to 550 million bushels. The average trade guess was 574 million bushels. This bullishness in the soybeans helped the corn market from going lower as well. The soybean tariff talk died way down this week, as the political attention turned to the genocide in Syria. Some market pundits are considering this lull as a maybe the end of the tariff talk, but others state this is just the beginning of changes to come in the Trump administration. Trump administration is also looking into re-installing the Trans-Pacific Partnership (TPP). Trump first abandoned this trade agreement his first week in office, but now looks to see if it should be reinstated.