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Grain Comments: 01-09-2024

Good morning.

Classic turnaround Tuesday action has been seen so far in the overnight ag markets, as everything besides bean oil is reversing course from yesterday. Bean oil put in its reversal during the day yesterday, and is following through on that this morning, up another 50-60 points. Traders continue to await coming crop production numbers, with the first of those due from CONAB at 6am central Wednesday morning. Corn futures are trading 1-2 cents higher, soybean futures are 4-5 cents higher, and the Chi wheat market is also trading 4-5 cents higher. Soybean meal trading around 50 cents higher. Outside markets mixed in a reversal of yesterday, crude oil futures are up $1.50-1.60, the stock market is around 0.4% lower, and the US$ index is up almost 30 points.

In what feels like the only real updatable story these days, German shipping company Hapag-Lloyd announced overnight it would suspend transit through the Red Sea for the rest of the week, and another update would be given this weekend.

There were unconfirmed rumors of some companies attempting to strike deals with the Houthis to allow safe transit.

US Secretary of State Antony Blinken is meeting with Israeli officials today as part of his continued middle east tour, to discuss solutions for both the Red Sea crisis, as well as the conflict in Gaza.

A host of private crop consultancy groups in Brazil have updated production forecasts ahead of tomorrow’s CONAB report. Grupo Labhoro lowered their estimate yesterday to 145-147 mmt’s.

Cogo consultancy lowered its estimate from 160 mmt’s, down to 155.24 mmt’s yesterday. Seems most of the private guesses are between 155 and 140 mmt’s at this point.

Soybean harvest in Brazil was just 0.6% complete as of yesterday, vs an avg of 0.4%. Corn traders will look for this number to increase in coming weeks to allow the timely planting of the second corn crop.

Corn open interest is up nearly 83,000 contracts in the first 5 trading sessions of 2024. This reflects fund managers’ growing willingness to place new short bets in the corn market.

Key to soybean prices beyond supply updates this week, will be whether funds also want to press new short bets in soybean futures in the coming weeks/months.

Last night’s US Midwest winter storm generally tracked farther north and west than what was originally anticipated. Central/Eastern IL saw snowfall of 1-2″, vs 3-5″ forecasted. Another system moves through the area again Friday-Sunday this week.

South American weather forecasts continue to offer monsoonal rainfall to the Northern half of Brazil into January the 16th. Totals begin to diminish in the 10–15-day period. Southern Brazil has begun to trend slightly drier in parts over the last 3 weeks and could use a shower or two.

Weather in Argentina remains nearly ideal, with showers over the next 10 days to produce .25-1.25″ of moisture.

The CBOT this week is all about government production updates, out first from Brazil, and then from the US at the end of the week. Trade likely remains choppy until Friday/next week.

Have a great day!

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