Market Report

Markets

1/4/16@10:33am
Dow -432.62
S&P -48.21
Nasdaq -145.65

Global stocks started 2016 with a sharp selloff as fresh signs of economic slowdown in China deepened fears about global growth and lowered hopes for a better year.

The Dow Jones Industrial Average declined 351 points, or 2%, to 17074 shortly after the market opened, while the S&P 500 dropped 1.8% and the Nasdaq Composite fell 2.2%.

Weaker-than-expected manufacturing data and a falling currency triggered a 7% fall in mainland Chinese stocks that led authorities to halt trading there before the end of the session.

Meanwhile, rising tensions in the Middle East added to bearish sentiment across markets and sparked volatile trading in oil, offering a further glimpse of the themes investors say are likely to influence markets this year.

Grain Market

1/4/16@10:30am
Mar Corn -6’4 @ $3.52’2
Mar Beans -8’0 @ $8.56’2

The above political stories are causing negativity in the markets this morning.  The question of the day is will $3.50 hold on March Corn?  That will be the thing to watch today.

Corn

Brazil exported 27.1 million metric tons of corn this year as of the third week of December, setting a new record according to Cepea. Surpassing the previous (2013) record by ½ a million metric tons.

Corn basis levels firming as producer has gone quiet with corn making new lows almost every day last week and making new contract lows this morning pushing down to $3.50 on March Corn by 10:00am.   We continue to have strong support at the 3.50 level.  Producers like to move grain/core bins in Jan, so we may see some grain movement.  But will it be a sale, or price later?  Since we have seen basis improvement as the market declined, I see some real potential here for additional basis improvement in the short term as the market continues to make new lows.  Especially if the market breaks $3.50, processors are going to have to pay up, or growers won’t crack the bins.

Beans

China’s struggling economy hits soybeans this morning as concerns for Chinese demand continue to be a concern, Bean basis steady to a touch firmer but processors are reluctant to add to ownership with margins suffering.  Meal weighing on crush values with margins not seen since 2013.  So as we may see some basis improvements, I don’t see as much opportunity short term as we do for corn.

EXPORTERS CHANGE DESTINATION OF SALES OF 217,000 TONS OF SOYBEANS FROM UNKNOWN DESTINATIONS TO THE NETHERLANDS FOR 2015/16 DELIVERY – USDA

Weather

Winter storms in the Midwest have sent excess amounts of water in rivers causing flooding in Illinois, Missouri and Arkansas and cities down steam.  It is forecasted to compare to the 1993 floods which caused $15 billion in damage and many deaths.

Greg Mockenhaupt

ProEdge Risk Management Consultant

P: (402) 685-5613 | Greg.Mockenhaupt@cvacoop.com

1007 County Road O

Oakland, NE 68045