Weekly Market Wrap-Up
Grain Market Commentary
Friday, November 30, 2018
by Jay Smith, Grain Associate, The Andersons
The G20 meeting on Friday and into Saturday was the focal point of the week. Most predictions are pointing to an outcome of the U.S. and China agreeing to continue talking, but no concrete solutions. Funds throughout the week continued to hold on to sizeable short positions, with neither bears or bulls willing to stick their necks out until after the Presidential meeting. There was very little fundamental news throughout the week to get the markets overly excited. Everyone is just looking for the next tweet, headline, news release, etc. It is worth noting that Russian and Ukrainian tensions had wheat markets up this week.
December corn opened the week at $3.59 and closed Thursday at $3.60 increasing 1 cent. The Andersons rolled to the March futures Thursday at close. March corn opened Friday at $3.73 and closed at $3.77 a 4-cent increase. Early in the week corn struggled to shake the bearish news in beans paired with favorable weather in Brazil and Argentina signaled that export interest in U.S. corn may wain. Stiff competition in the Black Sea also did not help the U.S. corn story but as the week progressed corn found support between old lows and trendline support. Late in the week, corn got out of its oversold position and export data was strong, signaling the U.S. regaining its export competitiveness into the world market. Moving into the G20 meeting, corn will be tied to beans, but the promising export numbers should keep it from dragging too low if news from the G20 is not positive.
January beans opened the week at $8.81 and closed at $8.94 a 13-cent increase. Early week beans had very little optimism about trade which had them getting crushed, finishing down 19 cents Monday. Regardless of volatility, beans were still able to hold trendline support which kept them choppy and sideways moving through the week. This weekend has so much potential beans could not entice new sellers or find new buyers, keeping the swings very volatile yet they have remained between their 50 and 100 day moving average for the month. Late week there was and has been a massive uptick in out of the money call volatility as protection against a positive trade outcome being bought by the speculative crowd. As with corn, bears or bulls do not seem willing to stick their necks out until the G20 summit concludes Saturday.