A market analyst suggests grain markets continue to show they have been oversold, and in the absence of factors – other than supply and demand fundamentals – the market is seeking a higher value.
Zaner Ag Hedge market strategist Brian Grossman rests his case on the U.S. Department of Agriculture’s weekly Export Sales report. Grossman says the Department reported “pretty solid numbers” this week.
“Old crop soybeans coming within the range of expectations at 252,000. News crop soybean, above the expectations, at 613,000. Soymeal was equally as strong. Corn, fairly impressive – above estimated ranges. Six-hundred-forty-one-thousand on the old crop and 775,000 on the new crop,” Grossman said.
Sales to Pakistan and Iran boosted U.S. soy shipments. Grossman admits he was surprised by the recurring interest. However, he wonders if a drunk cargo captain will end up in China, as Chinese soybean sales should soon start to pick-up.
Grossman says today’s report was “encouraging,” but adds, “we’re not through the woods yet.”
“We could have any kind of trade development blow up in our face, but this is the market getting over the fear factor,” Grossman said. “We’re finding value in grain, we have really good demand and eventually, we will get over this fear hump. Right now, I think a lot of it is we’re getting desensitized to the talk of tariffs. They’re on. They’ve been on for a couple of weeks nows. We’re continuing with life and getting back to the fundamentals.”
Factors influencing the market this week include weather and a strong U.S. dollar. Grossman reports the U.S. dollar was up 45 Thursday morning, posting a new calendar high. He adds a stronger currency could later impact exports.