Market to Market - Market Analysis

The coronavirus, weather and traders waiting on Chinese buying had a mixed effect on the market. For the week, March wheat plummeted 16 cents and the nearby corn contract lost 6 cents. Despite worries over the above mentioned factors and predictions of large South American crops the March Soybean contract gained 12 cents. March meal added $1.80 per ton. May cotton rose 27 cents per hundredweight. Over in the dairy parlor, March Class III milk futures lost 37 cents. The livestock sector was mixed.

The USDA says it will not include Phase 1 projections in next week’s WASDE. Commodity traders are expected to subtract China’s projected purchases and recalculate carryout numbers. For the week, March wheat rose a nickel and the nearby corn contract gained 2 cents. Predictions of heavy rain in South America and evidence the coronavirus scare is fading, helped add a dime to the March soybean contract. March meal fell $1.70 per ton. Cotton expanded a quarter per hundredweight. Over in the dairy parlor, March Class III milk futures lost 37 cents. The livestock sector finished mixed.

To say the commodity markets took it on the chin this week would be an understatement. The Coronavirus and good harvest weather ran the bulls out of LaSalle Street. For the week, March wheat dropped 20 cents and the nearby corn contract lost 6 cents. The Wuhan Coronavirus combined with reports of good weather in Brazil slashed the March soybean contract by 30 cents. March meal fell $7.30 per ton. Cotton dropped $1.90 per hundredweight. Over in the dairy parlor, March Class III milk futures declined 42 cents.

The commodity markets faced weather in South America and traders waiting to see if Chinese buyers would make good on their Phase One promises. For the holiday shortened week, March wheat gained 3 cents and the nearby corn contract lost 2 cents. Higher U.S. soybean prices and the fact that Chinese demand has yet to materialize pushed the March soybean contract 28 cents lower. March meal lost $2.30 per ton. Cotton continued its decline falling $1.90 per hundredweight. Over in the dairy parlor, February Class III milk futures climbed 49 cents.

“Buy the rumor, sell the fact” gave way to concerns that China has some wiggle room in their $40 billion part of the deal. For the week, March wheat gained 6 cents. The nearby corn contract battled back from early week losses to gain 4 cents. The March soybean contract lost 16 cents largely on skepticism over the Phase 1 deal. After closer examination, language in the agreement revealed China only needs to buy grain from the U.S. if the price is in their best interest. March meal lost $2.90 per ton. Cotton ended a 7-week rally as the March contract lost a penny per hundredweight.

The potential for conflict with Iran and commodity traders positioning themselves for Friday’s WASDE dominated the markets for most of the week. The report overpowered those factors in the final hours of the last session. For the week, March wheat gained a dime. The nearby corn contract had been trending lower but ended flat in the wake of the report. The March soybean contract whip-sawed its way through the week. A 13 percent decline in year-over-year soybean stocks helped add a nickel. March meal gained $2.30 cents per ton.

Optimism over the China trade deal met head on with anticipation of the size of the 2019 crop for most of the week. The drone strike in Iraq created risk off conditions by the final session. For the week, March wheat fell 2 cents, while the nearby corn contract dropped 4 cents. Tensions in the Middle East, and anticipation over the January 10 crop production summary, kept the March soybean contract even. March meal gained 80 cents per ton. March cotton expanded 28 cents per hundredweight. Over in the dairy parlor, February Class III milk futures fell 13 cents.

The gifts of optimism and spec fund buying in the wake of a trade deal moved much of the commodity markets higher. For the week, March wheat gained 14 cents, while the nearby corn contract added 2 cents. Bean oil demand added to trade confidence to lead the soy complex higher as the January soybean contract added a penny. January meal declined $2.50 per ton. March cotton gained 96 cents per hundredweight. Over in the dairy parlor, January Class III milk futures fell 27 cents. The livestock sector was mixed.

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The announcement on Friday of a trade deal with China overshadowed the rest of this week’s trade news including a USDA report. For the week, March wheat gained 8 cents, while the nearby corn contract climbed 4 cents. The White House says China committed $50 billion in sales, but China has yet to confirm the number. The January contract skyrocketed 18 cents on the rumors and facts. January meal fell $2.40 per ton. March cotton improved 80 cents per hundredweight. Over in the dairy parlor, January Class III milk futures declined 67 cents. The livestock sector finished on a high note.

On Friday, the Chinese Finance Ministry said it would waive tariffs on U.S. soybeans and pork products. The details of the offer were limited as the commodity markets worked through the news. For the week, March wheat fell 17 cents, while the nearby corn contract dropped a nickel. Big questions like total tonnage and how buyers apply for exemptions were missing from the Chinese statement. The news had little to do with the 13 cent gain in the January contract. January meal moved $6.20 per ton higher. March cotton improved 74 cents per hundredweight.

We are producing this episode ahead of Thanksgiving to allow our production staff a chance to enjoy the holiday with friends and family. For the shortened week, March wheat increased 8 cents, while the nearby corn contract dropped a nickel. Limited sales to China helped keep soy complex in two-month lows as the January contract fell another 15 cents. January meal declined $5 per ton. March cotton improved 96 per hundredweight. Over in the dairy parlor, December Class III milk futures expanded 52 cents. The livestock sector was mixed.

Deteriorating weather conditions for harvesting remaining acres coupled with export reports helped boost the grain markets. For the week, March wheat increased 13 cents, while the nearby corn contract gained 7 cents. Headline trading between the U.S. and China did little to improve the market as the January contract fell 21 cents. January meal declined $8 per ton. March cotton weakened $1.84 per hundredweight. Over in the dairy parlor, December Class III milk futures expanded 21 cents.

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Rumors of progress in the Trade War, grain sales to Asia, and a Friday WASDE made for volatile grain markets. For the week, December wheat lost 6 cents, while the nearby corn contract dropped 12 cents. A brief news flurry over trade negotiations and confirmed sales to China did little to fire up the soy complex as the January contract closed 6 cents lower. December meal jumped a dollar per ton. December cotton improved 49 cents per hundredweight. Over in the dairy parlor, December Class III milk futures plummeted 59 cents.