GRAINS FAIL TO HOLD OVERNIGHT RALLY

Written By Sebastian Frost

MARKET UPDATE

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Overview

A somewhat disappointing day for the grains, but wasn’t necessarily bad.

Overnight we were roaring higher, as both corn and soybeans were trading above last weeks highs.

However, we came down well off those highs. Trading lower for part of the day before bouncing back to end the day slightly higher.

So it disappointing as we closed well off the highs, but it was nice to see us manage to close green across the board.

Why couldn’t we hold the overnight rally?

Mostly technical selling and farmer selling. Farmer selling often occurs after a rally from these lows.

Overnight soybeans were up +17 cents trading as high as high as almost $12.27 before closing at $12.12. Failing to close above last week's highs of $12.17.

Overnight corn was up +6 cents to $4.46 but closed at just under $4.41. Also failing to take out last week's highs of $4.45.

Adding pressure to soybeans, the bean oil market broke really hard off of it's highs. This was mainly due to palm oil breaking due to expectations of bigger production.

Yesterday the Feds left interest rates unchanged but signaled cuts. This led to the stock market rallying to new highs and pressured the dollar. Which is somewhat friendly for the grains.

Soybeans have found some support from Argentina rains. As they have experiencing  flooding. They already have a great crop. But getting rain now doesn’t do anything but delay the bean harvest. However this isn’t expected to cause too much concern as Argentina looks to get drier for the next week.

The upper midwest is expected to get several inches of snow early next week along with far colder temps than we have been seeing.

This is going to take away a lot of that early planting talk, and give the soil a much needed refresher.

Here is the 2 week forecasts and the soil moisture situation.

The US climate prediction center says that El Nino is rapidly getting weak. They expect a transition to La Nina. La Nina will support the odds of having a drier and hotter summer than normal and carry into fall as well.

Although we are getting a cold snap, the outlook for planting season still looks far hotter than normal.

The forecasts also have this planting season now shifting to wetter than normal. Perhaps we won’t get this crazy early planting everyone has been talking about.

However, looking towards the growing season that precipitation is suppose to die out for the western corn belt. The heat is expected to remain.

A week from today we have a major USDA report.

It will include the survey of farmers for their planting intentions as well as inventory. This will give the market a ton of fresh news and data to chew on. This will likely be a huge market mover.

The markets will be closed the day after this report for Good Friday.


Today's Main Takeaways

Corn

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In today’s update we talk about all the grains, the potential risk for high acres in soybeans, why the charts are friendly, ways to manage risk before next week’s report and more.

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Sebastian Frost
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