The first overnight trading session of 2021 was on fire for the grains. Unfortunately the day trade brought a cooling to the market with grains ending the day mixed. Sue Martin with Ag and Investment joined the Fontanelle Final Bell on Monday to highlight some of the reasons why there may have been pull back after the strong overnight session. At the top of the list it may have simply been profit it taking with overnight traders running the corn market to nearly $5 and soybean market to $13.50.
Martin is also closely watching the weather and labor situations in South America. Temps in Argentina and Brazil continue to be hot and dry, but some area’s have seen mixed precipitation. As for the labor side the port strike may not actually be over in Argentina. Martin will be watching the loading of ready ships to see if that offers any idea of where labor stands in Argentine ports.
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Money flow continued to favor commodities and especially grains on the last full trading day of the week. Arlan Suderman, chief economist for Stone X, highlighted in the Fontanelle Final Bell why money flow continues to favor commodities like corn despite ample supplies and healthy stocks to use. M1 money supply has a great deal to do with the current state of the bullish market and right now commodities have the story with South American weather, and supply chain issues.
Aside from looking at the commodity sector Suderman also explored the macro market as it currently stands. At first glance the stimulus bill being sent back to Congress may have looked bearish, but it could actually be bullish with President Trump pushing for more direct cash stimulus to Americans. With this much money in the system though inflation is set to take off in 2021 if the pandemic can be placed under control and the economy can reopen. Suderman walks through what to be aware of with inflation and the markets.
Catch these and other important market comments here:
Soybeans continue to hold gains, but Tuesday may have showed some weakness in the bulls rally. Aaron Bertels with Crossroads Marketing joins the Fontanelle Final Bell to explore all aspects of the soybean trade. Including South American production and why it may not be the time to try and predict South American weather or production. Bertels also gives insight into what the current inversion of prices on the soybean futures means to farmers.
From soybeans the conversation turns to corn and like soybeans stockpiles are an important piece to the puzzle. However there is still plenty of corn with most stock estimates holding above 1.5 billion bushels. Ethanol production continues to be sluggish in the US, but may not be that important to keeping corn above $4 in 2021.
Bertels also shares his thoughts on what acreage intentions might look like in 2021 and how likely inflation is to hit commodities.
Catch the full conversation here:
Markets started off in risk off territory on Monday, but ended positive for most of the commodity complex. Mike Zuzolo, Global Commodity Analytics, highlights that it may have started as a buy the rumor sell the fact with Congress finally getting a stimulus package near the finish line. Then pushing the risk off button more was London moving back into lockdown with a new strain of Covid-19. At the end of the day with the World Health Organization reassuring traders that the new strain should not be of great concern with the vaccine rollout. That helped to get equities back positive and commodities followed.
Zuzolo also shares the latest information from his grower survey on planting intentions for 2021. The latest round of government aid may be the final decision some farmers have for corn or soybeans in 2021.
Zuzolo also touches on wheat and weather. There is a possibility the current La Nina could weaken into the 2021 growing season.
Catch all of Zuzolo’s market comments from the Final Bell here: