Market advisor John Heinberg of Total Farm Marketing says the possibility of a government shutdown ending this week is adding optimism to commodity markets.
The entire commodity complex saw strength yesterday. Heinberg says traders are hopeful the “information blackout” will be lifted if Congress votes to reopen the government. He emphasizes that missing export data, especially for soybeans, has created uncertainty.
“The biggest thing this market is going to be looking for…is going to be those export sales numbers,” he tells Mid-West Farm Report, noting that questions remain about whether China has followed through on expected purchases. “The rumor mill basically has said they’ve picked up minimal supplies, nowhere near the number that was told to the marketplace.”
Soybeans could see the most volatility. Heinberg warned that if sales fail to materialize, U.S. beans have to come back in competitiveness in terms of price, which could trigger strong selling. He also pointed to heavy competition from Brazil, saying the country holds the largest supply of beans in the world and may have “a monster crop” coming.
As for China’s incentive to buy U.S. beans, Heinberg says, “It’s very difficult for me to find a real reason,” citing a 13 percent tariff, weak crush margins, and record port supplies. Government-backed Chinese buyers may still step in, he notes, because they avoid the tariff.
Looking ahead, Heinberg says this week’s WASDE report will be closely watched. With no production update since September, the market is seeking clarity on yields.
“The yield probably comes down,” he says, adding that rapid report preparation could make Friday’s numbers “not very friendly,” but traders will quickly “get back to where they think the corn market is.”
