Technicals

Corn futures caught a bid yesterday on some good export news, sales of 255,224 metric tons to Guatemala and Unknown (presumably South Korea) were reported. Export sales this morning came in at 1,006,900 metric tons, 28% higher than last week and 92% above the 4-week average.
March corn futures were little changed yesterday, with little new news hitting the wires. Export sales are pushed back to tomorrow morning. As noted for the last week, we believe option expiration will continue to keep a lid on the market at 390.
March soybean futures broke lower yesterday on what was largely technical selling. Yesterday’s weekly export inspections report came in at 1,199,000 metric tons, this was at the top end of expectations.
U.S benchmarks are consolidating lower in a healthy manner. The slightest signs of exhaustion crept into the market Friday with the Russell 2000 small-cap index finishing 1% from a new swing high achieved on the opening bell.
Last week’s signing of Phase-1 was a classic buy the rumor, sell the news response. The substance in the trade deal remains suspect in our eyes. China has stated several times that imports will be based on market conditions, ie: supply/demand and price (same as before).
Soybean futures continued to roll over on a continuation of the “buy the rumor, sell the news” reaction. On top of the dwindling good news, there was some bearish news coming from South America,
Grinding data this week has cocoa futures testing highs from 2018. The March contract reached 2729 on Thursday. Asian demand increased and provided market support – leading to more speculative buying.
In yesterday’s report we wrote: “It will be nice to get some clarity on the “trade deal”, but I wouldn’t hold your breath for something magical to happen.
China promises significant Soybean purchases after signing Phase One trade deal today. Farmers looking forward to more demand.
Soybean futures were mixed yesterday as much of the optimism around the Phase-1 deal seems to be priced in (see the 75-cent rally in December for reference).