Written Commentary
MORNING AG OUTLOOK
Surging temperatures in key growing areas of Argentina and S Brazil has stimulated higher trade across the Ag space overnight. This week’s decline in the US $$ and surge in the Brazilian real also providing support. The US $$ bounced overnight after reaching a 4 year low yesterday. The real surged to its highest level against the greenback since May-24. Look for the US Fed. Reserve to hold interests rates steady at the conclusion of today’s 2 day FOMC meeting. Crop stress levels are on the rise in EC Argentina as temperatures surge above 100 degrees F this week. Forecasts for cooler temperatures and better prospects for rain next week are needed to prevent additional yield reduction. In Brazil rains are needed in RGDS and the SC region following recent dryness. Rains in central and northern growing areas have slowed harvest activities. In the US frigid temperatures will gradually loss its grip across the NC Midwest giving way to more seasonal temperatures by early next week. Below normal precipitations across the nation’s midsection thru the first full week of Feb. Spot crude oil is up $.60 as tensions in Iran remain elevated. US stock indices are steady to higher.
Corn:
Mch-26 is up $.03 ½ near $4.30, hovering just below this week’s high of $4.31 ½. Today’s EIA data is expected to show ethanol production slip to 317 mil. gallons, down from 329 mil. the previous week as processors braced for the frigid cold across the nation’s midsection late last week.
Soybeans:
Mch-26 beans are up $.10 at $10.77 near session highs. Prices reach a 1 month high while holding just below resistance at 100 day MA at $10.82 ¼. Mch-26 oil is up 20 points at 54.61 establishing a fresh 5 month high. Mch-26 meal up $3 at $297. Monthly biodiesel and RD production, capacity and feedstock usage data on Friday. Census crush from December after the close on Monday. Production ideas in Brazil holding near 180 mmt while leaning below the current USDA forecast of 48.5 mmt in Argentina.
Wheat:
Prices are $.03-$.09 higher across the 3 classes. CGO Mch-26 is up $.09 at $5.32 holding just below this week’s high of $5.33 ¼. KC Mch-26 up $.07 near $5.40 also holding just below this week’s high of $5.44. Awaiting results of Tunisia’s tender for 100k mt of milling wheat and 100k mt of durum. SovEcon raised their Russian wheat export forecast 1.1 mmt to 45.7 mmt vs. the USDA est. of 44 mmt. SovEcon expects production for the 26/27 MY to slip to 83.8 mmt, down from 88.8 in 25/26 with exports slipping to 39.6 mmt.
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