This Week in Grain - December 28, 2018

10:37 AM 12/28/2018

Soybeans as of this writing are 16 cents higher hoping to end this 2nd to the last trading day of the year on a higher note.  Beans had been pushing lower for six consecutive sessions.  The volume of trading has actually been fair for a holiday week in comparison to years past.  Willing bean buyers remain hard to find due to trade war rhetoric turning mostly negative, and the March 1st deadline for additional tariffs to be imposed looms closer.  There is a U.S. trade mission heading to Beijing on January 7th, but this news hasn't developed a lot of support.  The major trade mission members don't appear to be making the trip.  There are reports Chinese livestock feeders are turning away from protein heavy feed rations, due to the tariff imposed. They intend to cut meal consumption by the equivalent of what they believe they would have to buy from the US.  It remains to be seen if this is bluffing or in fact reality.  Early soybean harvest is slowly gaining momentum in Brazil, with available stocks beginning to show up at ports in a couple of weeks.

Corn has had light volume this week.  There has not been much news to make any significant changes in direction.  March corn futures are trading from a 3.70 to 3.85 range. There is continued concern over profitability in the ethanol sector, which has provided market resistance.  Funds or managed money continue to hold a significant long position in corn.  DDG prices are being supported by reduced supply as ethanol plants reduce run times to help alleviate losses.

Wheat markets have weakened on increased estimates of Russian wheat crop production. March Minneapolis wheat made a new low on Thursday, but did close better.  Japan has revealed it is favoring Canadian and Australian wheat in 2019, making any rally in the wheat short lived.  Weather has been favorable in Russia.  Russia's currency continues to fall against the US Dollar, hitting 2 month lows.  This makes their wheat that much cheaper.

Jim Gallagher