Morning Comments; Friday, January 25th, 2019
MaxYield Cooperative - SETZ - Fri Jan 25, 5:35AM CST

Corn and soybeans are trading mixed this morning.

Last year in Mid -January, the July soybean contract saw a price run of $1.25 from low to high due to the severe drought in Argentina that cut production by 18 MMT. A sell off of $2.67 followed, starting in early March, as Brazil’s crop grew by 9 MMT, compensating half the total lost by Argentina.

Last year’s domestic soybean carryout in January was estimated at 470 million bu, versus this years estimated 955 million. The difference of 13 MMT. Private analysts continue to reduce Brazil production estimates, with the largest reduction so far at 12 MMT. Argentine estimates have been mostly steady, around 56 MMT, as reports of too much rain continue to circulate. Even with Brazil’s anticipated production cut, total South American production is seen much larger this year over last.

The large US domestic soybean carryout of 955 million bu. is generally being blamed on the US and China trade dispute. Which is undoubtedly a large factor, as year to date soybean shipments are off 470 million bu. from last year. The fact that a record crop was produced is somewhat overlooked. Analysis from a well followed firm stated that even if the US exported the same volume of soybeans this year, domestic carryout would be 650 million bu.

Market Movers; South American Weather and Chinese trade news.


Market Commentary provided by:

Karl Setzer Grain Commentary