Commodity Market Update February 13, 2019

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February 13, 2019 | by Joel Fingerman
Dear Joel:
Grains
Last Friday the USDA issued the February WASDE report. In general, there were no unanticipated data contained in the report and so no major price reaction with the release of the report.
Corn Ending Stocks were 1.735 billion bushels, while expectations were for 1.708 billion bushels (Chart 1, 2018 bar). The Stocks to Use ratio was 11.7% (Chart 2, 2018 bar). While not strongly bullish, the data are supportive of corn prices.
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Corn Ending Stocks were 1.735 billion bushels, while expectations were for 1.708 billion bushels (Chart 1, 2018 bar). The Stocks to Use ratio was 11.7% (Chart 2, 2018 bar). While not strongly bullish, the data are supportive of corn prices.
Soybeans Ending Stocks were 910 million bushels, while expectations were for 955 million bushels (Chart 3, 2018 bar). The Stocks to Use ratio was 22.2% (Chart 4, 2018 bar). The data remain bearish to prices with record Ending Stocks and record Stocks to Use ratio.
Chart 1
Chart 2
Chart 3
Chart 4
Energy
Despite colder than normal weather, the March-April natural gas calendar spread is now negative with April futures trading higher than March futures (Chart 5, black line). Traders currently believe natural gas supplies will be sufficient for natural gas demand during February.
The March natural gas futures contract open interest has recently begun a steep decline (Chart 6, black line). Open interest decreasing while prices are dropping is usually an indicator of longs exiting the market. This will put pressure on prices causing the March-April calendar spread to become more negative.
Chart 5
Chart 6
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Regards,
The Fundamental Analytics Team