Selling pressure on the market continues

By Jon Scheve, Superior Feed Ingredients, LLC 

With the pressure to sell the market last week saw:

  • Old Crop Corn — down around 30 cents
  • New Crop Corn — down nearly 10 cents
  • Old Crop Beans — down around 80 cents
  • New Crop Beans — down nearly 50 cents.

China cancellations

China’s corn cancellations did not help the corn market. So, now the market is trying to figure out if there will be more. 

South America

There are suggestions circulating of possible limited port capacity in Brazil due to a very large bean and sugar crop that needs to be exported first. With those crops being worth more per ton than corn it could mean less space available in the summer to load corn than the trade is currently expecting.

Weather

Most of the Corn Belt is experiencing good weather conditions. Therefore, the market is growing less concerned of any potential weather issues severely impacting yields. A change in forecasts could change market direction in a hurry.

Black Sea

The Black Sea export corridor was extended again. At this point it may not impact the market much anymore as it is believed that Ukraine is nearly out of old crop corn. While the threat of closure remains a possibility in the future, it is seeming less and less likely to occur.

Debt ceiling

Despite positive comments on Thursday by both sides of the political isle that a deal could be made, debt ceiling negotiations broke down on Friday. The threat of the U.S. not paying its debts would be catastrophic to the economy and makes some traders want to be sellers instead of buyers. While it seems most likely a deal will eventually be made, the market will be on edge until it happens.

Bottomline

A spark is needed for the current downward market trend to turnaround. Unfortunately, it is difficult to know what that will be or when it might occur.

Please email jon@superiorfeed.com with any questions or to learn more. Jon grew up raising corn and soybeans on a farm near Beatrice, Neb. Upon graduation from The University of Nebraska in Lincoln, he became a grain merchandiser and has been trading corn, soybeans and other grains for the last 18 years, building relationships with end-users in the process. After successfully marketing his father’s grain and getting his MBA, 10 years ago he started helping farmer clients market their grain based upon his principals of farmer education, reducing risk, understanding storage potential and using basis strategy to maximize individual farm operation profits. A big believer in farmer education of futures trading, Jon writes a weekly commentary to farmers interested in learning more and growing their farm operations.

Trading of futures, options, swaps and other derivatives is risky and is not suitable for all persons. All of these investment products are leveraged, and you can lose more than your initial deposit. Each investment product is offered only to and from jurisdictions where solicitation and sale are lawful, and in accordance with applicable laws and regulations in such jurisdiction. The information provided here should not be relied upon as a substitute for independent research before making your investment decisions. Superior Feed Ingredients, LLC is merely providing this information for your general information and the information does not take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain advice based on their unique situation before making any investment decision. The contents of this communication and any attachments are for informational purposes only and under no circumstances should they be construed as an offer to buy or sell, or a solicitation to buy or sell any future, option, swap or other derivative. The sources for the information and any opinions in this communication are believed to be reliable, but Superior Feed Ingredients, LLC does not warrant or guarantee the accuracy of such information or opinions. Superior Feed Ingredients, LLC and its principals and employees may take positions different from any positions described in this communication. Past results are not necessarily indicative of future results.

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