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Grain Comments: 01-05-2024

Good morning and happy Friday.

Soybeans/meal have made fresh new lows for their respective moves overnight, while the corn and wheat markets continue to chop sideways. Key today will be whether we see managed money cover shorts going into the weekend, as they are now net-sellers in all 3 markets. Corn futures are down 1/2 cent to a penny, soybean futures are 3-4 cents lower, and the Chi wheat market is up 2-3 cents. Products mixed, meal $3-4 lower and bean oil is up 20-30 points. Outside markets also mixed, crude oil futures are up 50-70 cents, the Dow jones index is down 100 points and the US$ index is up 30 points.

Financial markets look to this morning’s employment data to key late-week price direction. Most economists see US job growth having moderated in December.

This morning’s weekly export sales report is a day later than normal due to the New Year’s holiday. Traders are looking for 500k-1.2 mil mt’s of corn sales, 500k-1.3 mil mt’s of soybean sales, and 150-450k mt’s of wheat sales.

Argentina weekly crop progress, out last night, showed soybean planting in the country had reached 85.8%, up from 78.6% the week prior. Corn planting was seen at 77.6% complete, compared to 69.9% a week ago.

Soybean condition ratings were up 2% in the good/ex category to 42%, while being down 1% in the fair category (56%). Poor/very poor went from 3% to 2%.

USDA’s ag attaché in Brazil lowered their estimate of the Brazilian soybean crop to 158.5 mmt’s, citing drought conditions in the Centre West states caused by El Niño.

Index funds will begin their role/rebalance next Monday. CBOT grains are forecast to see cumulative new buying of 75-80,000 contracts. While the buying will be supportive to corn/wheat futures, most of the purchases are TAS trades, therefore limiting the impact on daily price fluctuations.

Shipping magnate Maersk has announced that it will be diverting all vessels around Africa’s Cape of Good Hope “for the foreseeable future”, as risks in the Red Sea continue to disrupt world trade for at least another weekend.

“The situation is constantly evolving and remains highly volatile, and all available intelligence at hand confirms that the security risk continues to be at a significantly elevated level,” Maersk officials said on Friday.

South American rainfall in the last 24 hours was seen from .15 to 2.80″ across the Northern growing regions of Brazil. Forecasts continue to offer monsoonal rainfall for the next 10 days. Argentina and areas in the south have adequate soil moisture as of today.

Frigid temperatures across the Black Sea/Russia, and also in US winter wheat areas, will likely add stress to the winter wheat crop in the coming 10-15 days. Damage will be hard to assess until Spring.

Markets await next week’s CONAB/USDA reports for new fodder to chew on.

Have a great weekend!

 

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