Corn, soybeans, and wheat closed lower for the day. Grain prices have had a sporadic week trading higher one day and then lower the next. The influence of fund money flow and outside markets has played a big role in agricultural commodity markets this week simply because there is a lack of meaningful grain stories at this time. Most of the bullish noise is speculation at this point. For example, we may indeed have another wet spring and delayed plantings, but that is not known for sure yet. Also, reports of problems from South American are minor and still do not offset the outlook for very large production numbers. Today's export sales also added pressure to the market. Weekly sales for corn were 401 mt, soybeans 239 mt, and wheat 375 mt. All three sales are disappointing. While soybeans and wheat are still on pace to meet USDA projections, corn needs to average just over 700 mt a week to reach the current USDA figure. Bean export figures should remain low as South American picks up harvest and picks up the business. Today there were rumors that China cancelled a few US cargoes due to cheaper South American prices. The US Jan soybean crush was 167.9 mil bu, soymeal stocks 630,497 tons and soyoil stocks 3.239 billion lbs. The crush was lower than expected and stocks were higher than expected.
Tomorrow is first notice date for March contracts. Soybean deliveries will be monitored closely with the tight old crop outlooks. Outside markets reversed from yesterday's friendly tone and reflected commodity selling with both crude oil and the stock market sharply lower. However, by the day's end financial markets had recovered and the dollar was trading lower. This will likely keep things mixed for tomorrow with funds and outside markets the major influences. Open interest (decline again today) has pointed out some interesting details so far this week. Index funds appear content with their current positions as their open interest has not changed significantly. Traditional funds have been short covering this week. Corn has liquidated 48,000 contracts so far this week, soybeans near 42,000 contracts, and Chicago wheat has liquidated approximately 25,000 contracts.
Producers need to continue to look to sell rallies and have a plan in place for marketing. Tomorrow is the last trading day in February and this means that prices will be set for CRC, RA, and GRIP insurance policies. This price guarantee is just one of the factors that producers will have to consider when deciding acreage and insurance coverage levels. We encourage you to contact your insurance representative and please call us if you have any questions.
Corn and Soybean Daily Open Interest
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