Weekly Market Wrap-Up
Grain Market Commentary
Friday, August 3, 2018
by David Gleason, Associate Merchandiser
Grains had an up week on the extended weather forecast looking slightly more threatening although this did cool by the end of the week. China and the United States still remain at odds over the latest rounds of tariffs with Trump stating that he might like to take the tariff from 10% to 25%. Things feel better on the trade front with Canada, Mexico, and Europe. Crude oil is consolidating between the 50 and 100 day moving average and looks vulnerable to a downside breakout. The dollar is still respecting the top end of its recent range but looks poised to potentially blow the top off if we can clean up some trade issues.
Dec corn opened the week out at $3.78 ¾ and closed the week out at $3.84 ¼. Corn managed to close above the 50 day moving average this week for the first time since may. Corn saw its first major private estimate from FC Stone this week at 178.1 bushels per acre. While this would be a record crop, it still presents us with a declining carryout year over year which provided support to the market. Another thing to consider with today’s demand situation is how many corn acres will we plant next year. If beans cannot replace the China demand in full then producers will likely come back to corn wheat with the majority of those acres.
Nov beans opened the week at $8.94 ¼ and closed the week out at $9.02 ¼. Beans remain below the 50 day moving average. Selling pressure on beans have been lifted here lately on the aid package that congress approved to offset tariff damage. FC Stone did come out with a 51.5 bushels per acre yield estimate which would be short of record by a half bushel. This type of yield will leave the US with a burdensome carryout scenario.