Yesterday, I commented about the confluence of factors that have worked together to push the bean market higher over the past 45-days, but realistically, the same applies to the corn and even wheat markets at this point. If we were to wrap up the week right now, we would find December corn up 7-cents, December Chicago wheat up 17, and November beans are leading the charge with a gain of 40-cents. Looking at the combination corn, wheat, and bean chart, this rally is very similar to the advance, in both time and price, recorded last summer once the market had finally come to terms with the abandoned acreage, and we are now within striking distance of the highs set back in 2018. While there is nothing yet within this price action to suggest the party is over, but do keep in mind that uninterrupted rallies of more than six or seven weeks are difficult to come by at any time of the year, and one would have to believe even more so at the onset of harvest.
To cap off a week for export sales, China was back again overnight. The USDA reports they have purchased another 210,000 MT of corn, 132,000 MT of soybeans, and in addition to this, 100,000 MT of meal was sold to unknown destinations.
It would appear that more federal aid is coming to the farm sector. Speaking at a rally in Wisconsin last night, President Trump announced that another $13 billion in relief funds would be released next week to counter the coronavirus’s impact. Specific details will reportedly be unveiled later today, but signup is scheduled to begin on Monday. As a side note, yesterday, stories were circulating that the administration had floated the idea of providing $300 million in aid to the refiners who had been denied blending exemptions. Reportedly, the source of the funds would be the USDA, and once that had leaked, a number of lawmakers, from both sides of the aisle, rightfully began to voice opposition.
We have not taken a look at the equity markets for a few weeks, so it might be an excellent way to finish this one. The S&P 500 is on track to close higher for the week, but the performance is certainly not impressive. In any given year, equity markets tend to run out of steam are we move into the fourth quarter, and with the uncertainty of an election as well in 2020, it is hard to imagine why this one would be different. Already, we have weekly indicators quite overbought and on the cusp of turning lower. There is, of course, one caveat that could come into play this year. If the government does decide to put together another economic stimulus package, it could be enough to provide another boost to markets as well.
