Weekly Market Wrap-Up
Grain Market Commentary
Friday, January 31, 2020
by Paul Matthews, Associate Merchant, The Andersons
This week began sharply lower across all markets amid fears of the economic impact of coronavirus and its potential global implications. The Chinese are attempting to quarantine and contain the situation however, this will remain a big mover in the market for the immediate future. The issue facing commodities will be the now continued speculation over Chinese purchases that were predicted to support positive price movement, but that has been drawn into question.
Export inspections reported Monday were mixed with corn up 270 thousand metric tons from the previous week, while soybeans were down about 167 thousand metric tons, and wheat down about 290 thousand metric tons.
Tuesday’s price action began with markets taking away some of Monday’s late gains as more speculation and fear with regards to international travel and trade drained more Chinese trade deal premium out of the commodity sector. Given this perceived negativity, corn was resilient and finished strong and closed a technical gap in the chart.
Wednesday began with a continued shaky feel to commodities amongst continued uncertainty regarding Chinese ag sales. Given this negative price action, the bright spot is the U.S. competitiveness in world markets particularly in corn.
Thursday’s trade was again weighed down by more negative news regarding coronavirus and anticipated travel and trade restriction with China. Export sales reported Thursday were mixed with wheat net sales down 7%, corn up 23%, and soybeans down 41% from the previous week.
Friday’s markets with month-end concluding continued to be on edge with soybeans dropping to lows last seen eight months ago. The trade is finding it increasingly difficult to invest back into commodities as fears that international trade especially with the Chinese will be a risk that most will be unwilling to take. Next week the Lunar New Year holiday will conclude, and Chinese markets will come back on line which some look to soften some of the negativity moving into next month.
March corn opened the week at $3.8425 and closed at $3.8125 a 3-cent decrease for the week.
March soybeans opened the week at $8.9925 and closed at $8.725, a 27-cent decrease for the week.
March wheat opened the week at $5.6775 and closed at $5.5375, a 14-cent decrease for the week.
Stay tuned to andersonsgrain.com for additional commodity market information.