Market Commentary  10/15/18 2:45:37 PM Printer Friendly VersionPrinter Friendly Version

Monday, October 15, 2018


Corn futures ended the session higher, mostly on spillover support from stronger soybeans as well as stabilization in the stock market. Hedge funds are thought to have turned net-long corn futures after today's buying spree. The December contract traded through its 100-day moving average of $3.73 ½ but was unable to reach the $3.80 mark. Traders will be monitoring U.S. harvest progress this week as the weather maps indicate conditions should be favorable for farmers to get back in the field. Rainfall coverage was widespread across the Corn Belt this weekend but accumulations were generally short of an inch. The forecast for the Midwest calls for limited rainfall across the region over the next 10 days. Temperatures over that same timeframe are expected to run below average. This afternoon will bring weekly crop progress/condition ratings. Traders are expecting to see approximately 40% of the corn crop harvested. A week ago, NASS reported U.S. corn harvest at 34% complete. Weekly U.S. corn export inspections came in below market expectations this morning at 39.2 mln. bu. This was a sharp drop from last week’s 54.5 mln. bu. and the 2nd lowest total thus far this marketing year. However, the pick-up in soybean exports last week may have negatively impacted corn loading and despite the decline, corn exports remain 75% ahead of last year.


Soybean futures traded firmer today on short covering. The November contract pushed through resistance at $8.74 ¾, which was the Oct. 8th high, on support from strong weekly export inspections and a record NOPA crush number. U.S. soybean exports sharply exceeded trade estimates this morning, at 42.5 mln. bu. This was also significantly firmer than last week’s 21.8 mln. However, exports were still below last year's same-week total of 65.6 mln., leaving cumulative exports down 35% from a year ago. It is interesting to note that this week's shipping activity did show beans heading to China both out of the gulf and off the PNW (about 5 mln. bu. total). September NOPA soybean crush was record large this morning at 160.78 mln. bu., marking a new record for the month. Later this afternoon NASS will release updated U.S. crop conditions and harvest progress. Traders expect to see approximately 40% of the beans harvested. A week ago, 32% of the U.S. bean crop had been cut. In South America, soybean planting in Brazil is clipping along at a record pace. Per AgRural, as of October 11th approximately 20% of the expected area is in the ground. That's ahead of the previous record of 18% in 2016 and double the 10% five-year average for the date. Planting in Mato Grosso, Brazil's largest producing soybean state, is estimated at 34% complete, which is also a record.
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