Market Commentary  12/12/19 3:17:18 PM Printer Friendly VersionPrinter Friendly Version

Thursday December 12, 2019

Corn futures closed 9 cents higher in the December contract and 6 cents higher in the deferred months. Export sales at the upper end of expectations, very good sales announcements of corn to Mexico, a technically oversold market, and news that the U.S. and China were close to a Phase One trade deal all helped to support corn, especially after what seemed an unnecessary sell-off yesterday. Funds are short an estimated 121,000 contracts. After the close, news wires reported that negotiators have reached a deal with China and await approval from President Trump. It is reported the U.S. will drop some tariffs and not implement more tariffs after the December 15th deadline. In sales announcements, Mexico bought 42.3 mln. bu. of corn for 19/20 and 20.7 mln. bu. for 20/21. 4.4 mln. bu. also sold to unknown destinations for 19/20. Weekly export sales came in at 34.4 mln. bu., bringing YTD commitments to 610 mln. bu. vs. 1,089 mln. bu. last year, so we have some work to do. Buyers of note were Mexico, Japan, and Canada. Thank goodness for our Mexican buyers as they account for 52% of YTD known destination commitments (this doesn’t include today’s sales announcements.) Brazil reportedly buying Argentine corn as domestic basis has firmed enough to make this feasible. Brazil export basis offerings have been on the uptick.

Soybean futures closed 4 cents higher but off session highs, mostly on U.S./China trade news. Products mixed with SBM lower and SBO higher. Funds are short an estimated 72,000 soybean contracts. Weekly export sales came in at the upper end of expectations at 38.6 mln. bu. and bring YTD commitments to 992 mln. bu. vs. 908 mln. bu. last year. Buyers of note were China and Bangladesh. Currently, China accounts for 40% of known destination sales. China expected to be in the market for more business this week. S. American weather starting to gather more attention with southern Argentina drying out, as is NE Brazil. As Argentine production areas are more concentrated compared to NE Brazil, this area is getting the most attention.

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