Written Commentary
CORN
Prices were $.02-$.04 lower closing near the midpoint of the day’s range. Spreads recovered in late trade closing firmer. Mch-26 bounced after trading into new lows for the week at mid-session. Major MA resistance just below $4.40 with support at $4.17. The BAGE placed Argentine plantings at 97% complete. Crop ratings slipped to 46% G/E, well below the season high at 82% however better the 31% from YA. Speculative traders sold 2k contracts yesterday pulling their short position to 59k contracts while O.I. fell nearly 6k contracts. US exports remain strong, on pace to exceed the current USDA est. of 3.2 bil. bu. however more aggressive offers from Argentina may cut into US market share the 2nd half of the MY. Price likely to remain range bound between $4.15-$4.40 until more is known about SA crops.
SOYBEANS
Prices were lower across the complex with beans down $.08-$.10, meal was $3 lower while oil was off 50 points. Spreads firmed late with beans and meal slightly higher while oil spreads were unchanged. Mch-26 beans held support above this week’s low at $10.58 ½. Prices rejected trade above their 100 day MA the previous 2 sessions. Mch-26 meal and oil both slipped to new lows for the week before bouncing. The strong recovery in the US $$$ contributed to lower trade across the Ag. space today. Strength in the greenback was driven by Pres. Trump’s nominee to lead the US Federal Reserve along with higher than expected inflation data. The President selected former Fed Governor Kevin Warsh to head up the Central Bank. While Warsh has been critical of the Federal Reserve, he is viewed as a more hawkish selection compared to the other candidates. Spot crush margins slipped $.03 to $1.70 ½ while bean oil PV held steady at 47.7%. Census crush from Dec-25 after the close on Monday is expected to come in just above 230 mil. bu., which if realized would be the 2nd highest ever and up from 220.5 mil. in Nov-25. Oil stocks expected to jump 5% to 2.279 bil. lbs. Speculative traders were moderate sellers across the complex yesterday however O.I. was higher. Argentine crop ratings fell 6% to 47% G/E, still well above the 24% from YA. As global demands shifts back to cheaper offers in SA I lean toward another 20-30 mil. bu. cut to the current USDA export forecast of 1.575 in the Feb-26 WASDE. Rainfall distribution (or lack thereof ) across Argentina will likely be the key determinant in price action next week. As of this writing no data yet from the EPA on biodiesel & RD production, capacity and feedstock usage.
WHEAT
Prices were $.03-$.05 lower across the 3 classes closing near midrange. Both CGO and KC Mch-26 contracts traded to fresh 2–2 ½ month highs before backing up. Spreads firmed in late trade finishing slightly higher. Open interest in CGO rose just over 300 contracts yesterday as speculative traders were net buyers. O.I. fell nearly 4k in KC futures. US winter wheat area in drought fell only 1% LW to 41% despite the major winter storm. Little to no moisture for the S. plains over the next week. Moderate amounts for the S. Midwest and ECB. US export demand remains decent however not likely to exceed the current USDA est. by more than 10-20 mil. bu. The next monthly crop ratings will give better idea extent of damage to this year’s US winter crops from the recent frigid outbreak. Higher trade in wheat this week with everything around it lower would suggest some concern for the US winter crop. Cold temperatures in Russia not much of a threat with heavy blanket of snow, however could led to spring flooding.
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