Weekly Market Wrap-Up
Grain Market Commentary
Friday, February 16, 2018
by Seth McLaughlin, Associate Merchandiser
The USD continues to weaken creating a more competitive aspect for US Exports. Weather concerns in South America Especially in Argentina was the main driver in this weeks’ market movement. Bean meal was up roughly $25 per ton, causing beans to follow. Argentina is the world’s largest bean meal exporter. There is rain being called for but doesn’t cover a large area.
Beans closed last Friday 2/9/18 at $10.04, opening the following Monday at $10.10. Closing Thursday afternoon at $10.24. Fundamentally U.S. Beans are bearish but with the rally in soybean meal that has caused soybeans to follow. Argentina Weather was the main driver for the bean meal rally this week. They are the world’s largest bean meal exporter in the world. Holding off to sell in case the prices goes higher is not the right marketing play here. U.S. Producers should be looking at these values and laying off some risk here while futures are at values we’ve been waiting for. The Chart below shows that we have broken through the 50 day moving average, and are now touching recent highs that we saw in the beginning of December 2017.
Corn trending better as exports continue to break expectations. We opened the week trading Dec 18 at 3.9450 and ended Thursday afternoon up 3c at 3.97. As we continue to get closer to the 200 day moving average we should start looking at laying off risk here near the $4.00. Last month USDA did take carry out down, but are still calling for 2.352 billion bu. Carry-in to next year. That number even with recent rallies is still fundamentally bearish.