The seasonal February break is upon us. This began with rain in some of the dry areas of South America over the weekend.
In the corn market, last Friday the USDA released their cattle on feed report reinforcing the demand destruction that existed at higher values. The report showed that domestically cattle on feed is at the lowest level since 1959. Ethanol plants struggling to stay afloat and exports lagging the USDA goals. All of this leading to selling prior to USDA Supply and Demand Report next Tuesday. Longer term, seems as if this corn market is headed to over 2 billion bushel carryout.
The soybean market is definitely the leader in Chicago. We left January's trading range behind on Monday. This generating sell stops underneath 9.60 March Futures. The soybean market is finding some mild support at the 40 day moving average at 9.44 today. From a technical standpoint there lies little support below that until 8.80-8.90 area. Tomorrow's export sales data will be closely watched to see if their are any changes in Chinese demand.
On the bright side of the equation nearby basis levels are firming and should be rewarded.
Up and coming news:
USDA Export Sales 7:30am Thursday
trade estimates as follows:
corn 30-37 mbu
soybeans 17-24 mbu
USDA Supply and Demand Tuesday February 10th at 7:30am
Jeff Neisler
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