Weekly Market Wrap-Up
Grain Market Commentary
Friday, January 17, 2020
by Paul Matthews, Associate Merchant, The Andersons
This week started with commodity prices higher, but values quickly retreated during the day trade lead by soybeans which sank well off the overnight highs as the market attempts to answer questions brought up by Friday’s USDA report. The trade is expected to make its own adjustments as it processes the data from last Friday while it awaits more U.S./China trade news.
Export inspections Monday were mixed with corn, down about 90 thousand metric tons, soybeans up 100 thousand metric tons, and wheat up 50 thousand metric tons each.
Tuesday kicked off quietly as the market awaits the ceremonial phase one trade deal signing. South American weather conditions continue to appear benign for the moment further adding to the lackluster price action leading into Wednesday’s trade deal and the details it contains.
Wednesday’s trade began mostly mixed in low volume as attention was turned to the late morning news regarding the U.S./China phase one trade deal signing. The President did sign the initial trade deal with China, which was an 86-page agreement that includes a pledge from Beijing to double its purchases from American farmers in the first year. The deal is set to take effect after 30 days, and within a year China has promised to buy an additional $12.5 billion in U.S. agricultural products, and $19.5 billion in the second year.
Thursday price action followed the sell-off trend from Wednesday, as the trade is processing the newly signed phase one trade deal with China. Export sales this week had net sales for soybeans, wheat and corn up significantly from last week, and were also up looking back at the four-week average.
Friday was a big reversal in corn after trading five-week lows in the prior session as sellers felt confident with their positions after little change emerging from the phase one trade signing. The week ended on a more positive note, with commodities regaining most of Thursday’s losses. Markets will remain closed in observance of Martin Luther King Jr. Day and will reopen Monday night at 8 pm.
March corn opened the week at $3.865 and closed at $3.8925 a 3-cent increase for the week.
March soybeans opened the week at $9.48 and closed at $9.2975, an 18-cent decrease for the week.
March wheat opened the week at $5.6525 and closed at $5.705, a 5-cent increase for the week.
Stay tuned to andersonsgrain.com for additional commodity market information.