Morning Grain Market Research

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Grain and soy market tried to extend the winning streak into another week overnight but appear to have run into a little headwind at this time. That should not be unexpected as we really do not have a tremendous amount of supportive news circulating this morning. In the case of corn, after four positive closes in a row, we are probably due for a little breather. It is worth noting that managed money has swung heavily to the short side of all these markets since the December highs until this last week and notably appear to favor the short side of the corn market. Between mid-December and mid-March, they moved from long around 128,000 contracts to short nearly 258,000, marking a record for this time of year. As I commented last week, while they could be favored with perfect weather for the next four to five months and their positioning could pay off in spades, but that would seem to be a foolhardy bet. As they say, the bigger they are, the harder they fall but, in this scenario, it would appear the larger the short, the more potential there is for covering.

For anyone who thinks we are safe from the potential of an African Swine Fever outbreak in this nation need only read the newswires from the weekend. It turns out that U.S. border agents have seized approximately 1 million pounds of Chinese pork that someone was attempting to smuggle into this country. This product was uncovered at the port in New Jersey and was hidden in containers beneath ramen noodles and laundry detergent. The pork is being tested for ASF before it will be incinerated and thus far, no names have been released as to who was behind the scheme. That said, agents at the port commented that it was highly orchestrated and there was a concerted effort to conceal here to bring this product in. Kudos to the port authority for intercepting this as needless to say, if AFS reached our shores, not only could it be devastating to the hog industry but for feed usage as well.

Not much feature in the macros as we begin the week, but the action should be a little supportive for the ag sector. Energies are flat, metals higher and equities and the U.S. dollar are lower.

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