Morning Comments; Monday, February 4th, 2019
MaxYield Cooperative - SETZ - Mon Feb 04, 5:41AM CST

Grains are trading lower on the overnight session.

Two Chinese grain companies issued statements Saturday that confirmed each purchasing 36 million bushels of soybeans on Friday for spring 2019 shipment. Many in the trade think this could total five times that, up to 180 million bushels. This would be a potential additional 180 million bushels on top of what has already been booked but sales not committed to by the Chinese. While this is very good news for an overly burdensome soybean supply situation, a trade deal has not been accomplished. The two Presidents will meet later this month. Little if any news on trade negotiations would be expected this week as the Chinese began their weeklong New Year celebration on Saturday.

As we get closer to March 31st, the acreage debate continues to become more of a talking point in the markets. Many felt going into winter, we would see a sizable shift, possibly 4 to 5 million acres away from soybeans to other crops. The latest private estimates have not shown that, but closer to a 1 to 2 million acre shift. Soybeans prices have a tough hill to climb with carry out figures potentially getting larger than the current 955 million. Prior to recent sales to China, soybean exports lagged USDA projections by over 400 million. The pace will need to dramatically pick up to come anywhere near that. If export projections fall short, and we see a smaller shift in acres away from soybeans for 2019, the potential for next year’s soybean carryout to get larger becomes greater.

Market movers: Continued reaction to Chinese trade negotiations and weather forecasts.

For more information, you may contact Adam Suntken at (712)-454-1061, or e-mail at asuntken@maxyieldcooperative.com. The opinions and views expressed in this commentary are solely those of Adam Suntken. Data used in writing this commentary obtained from various sources believed to be accurate. This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position. Please visit our Risk Disclosure Page for more information on commodity trading.




 

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