Ag Market Updates: December 12 – 19
Corn followed beans up this week as exports continue to roll. China continues to be a buyer of US corn and continued La Nina weather in South America are helping pull prices up. Corn will continue to go as soybeans go (as usual) so any positive soybean news is also supportive for corn prices. There continues to be upside in the market as fundamentals continue to bullish with the downside being a change in weather for South America. Corn has been slow and steady and will continue to be with exports being the main news.
Soybeans finally broke through the $12 mark this week as world demand continues to drive prices. China potentially switching bean cargoes from Brazil to the US on shipping delay concerns (Argentina port workers strike) were supportive news as well as continued South American weather concerns. Southern Brazil and Argentina look to be dry into the end of the year while the rest of Brazil will get enough rain to keep it steady. As exports continue to be strong and on the high end of expectations it does not look like bean demand is going anywhere. Bean sales have reached 90% of the annual USDA forecast with 8 ½ months left in the reporting year. Until South American harvest gets rolling US beans look to continue to benefit from the export demand. With the magic $12 threshold being past we could see this run continue.
The Dow gained on the week as vaccines rolled out across the country while the current COVID wave is seeing new records every day. Congress continues to negotiate a stimulus bill as the year comes to a close. Many investors see 2021 as ripe for growth and still think there is time to get in to take advantage of a post Covid-19 US even if you missed the run up to 30,000 from the March lows.
Crude Oil has rallied back to pre-lockdown numbers this week as it got back to $49/barrel. As fuel consumption has slowly been growing a second round of lockdowns could lead to over supply problems if drilling is also not cut back.
The US dollar has continued to fall as it is again seeing value not seen sine early 2018. A low USD helps commodity prices and cotton more so than others as we have seen cotton’s recent run up.