Written Commentary
MORNING AG OUTLOOK
Mixed trade overnight as agricultural markets try to recover from yesterday’s bearish reversal. Speculative traders were lite to moderate sellers across the Ag space yesterday while remaining short all around except for a small net long position in soybeans. Now that China has met their 12 mmt purchase agreement for US soybeans they have been actively extending coverage from Brazil for March/April shipments. FOB offers from Brazil continue to run $.60-$.85 bu. under US gulf. After better than expected rains this past weekend, EC Argentina will be hot/dry again into early Feb. Widespread rains expected week 2 of the outlook. Limited rains and above normal temperatures in RGDS and SC Brazil for the next week. Better rain chances late next week. Production trends in Brazil are leaning steady to higher, while steady to lower in Argentina. Below normal temperatures to hold across the NC Midwest and ECB into early Feb. Gradual warming the WCB and northern plains. Much of the nations midsection to hold in a dryer than normal pattern the next 2 weeks. Spot crude oil is down $.15 per barrel in 2 sided trade. Fresh 4 month low for the US $$ index. US stock indices are mixed.
Corn:
Mch-26 is steady at $4.28 ½ while holding within yesterday’s range. Argentine FOB offers have fallen below US gulf thru April providing headwinds to the record US export pace. I look for a drop in ethanol production in tomorrow’s EIA report as processors braced for the frigid cold across the nation’s midsection late last week.
Soybeans:
Mch-26 beans are up $.02 ¼ at $10.64 at near session highs. Major resistance at 100 day MA at $10.82 ¼. Mch-26 oil has turned 30 points higher at 54.20. Resistance at yesterday’s 5 month high of 54.71. Mch-26 meal down $1 just above $293. Support rests at the January low at $288.40. Spot crush margins slipped $.07 ½ yesterday to $1.78 ½ bu. AgRural raised their Brazilian production forecast .6 mmt to 181 mmt, vs. the USDA est. of 178 mmt. They est. harvest has reached 5%. Harvest in Mato Grosso, the top producing state, advanced 7% to 14% complete.
Wheat:
Prices are steady to $.02 lower in 2 sided trade. CGO Mch-26 rejected trade above its 100 day MA for the first time in 2 months yesterday slipping back into its $5.00-$5.25 range. KC Mch-26 bouncing off 50/100 day MA support near $5.26 overnight. It will likely be weeks before we learn the extent of damage from the recent arctic blast. Good moisture across the SE plains and southern Midwest will provide temporary relief from drought.
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