Markets Range Bound

Corn spent most of the day today a penny or two higher, but closed about a penny lower. There was concern in the night session because the stock market in China was sharply lower. However the Dow had a nice rebound during the day session along with crude oil. Even the Dollar Index was lower, but still corn could get a rally going. Part of the problem is likely corn was right up against overhead resistance. The bears continue to fret about the economy in China and decreased demand for corn and especially beans. If you are the ruling class in China would you want 1.3 billion people calling for your head because they are hungry?

It was a two-sided day in beans, too, and they finished with modest losses of 2-4 cents. For the past two weeks March beans have traded between 8.80 and 8.90. That is a very tight range. It seems like the market is taking a wait and see approach as it is finally watching the weather in South America. At least it is on the radar screen of traders now. There are dry areas developing in Argentina and northern Brazil for a while. Make no mistake, there will be good crop from South America. But, just a drop in Brazil from 100 MMT to 95 MMT would be a "game changer" and we sure should see a break out to the top side.