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Grain Comments: 01-12-2024

Good morning. Happy Friday.

USDA report day. Crude oil futures are higher in overnight trade and have so far pulled the ag’s along for the ride. Price action into the 3-day MLK weekend will almost exclusively be determined by today’s 11am central data dump for the CBOT. Corn futures are around a penny higher, soybean futures are 5-7 cents higher, and the Chi wheat market is trading 4-5 cents higher. Products also firm, meal is up roughly $0.50/ton and bean oil are up 60-70 points. Outside markets mixed, with the stock market trading around 0.5% lower, crude oil futures up almost $3/bbl, and the US$ index up 20 points.

The United States and Britain last night launched an attack on 12 Houthi military targets in Yemen, the first attack on the rebel group since they began attacking cargo ships in the Red Sea in November. This has crude oil, as well as the metals markets, sharply higher to begin the day.

The Houthis have vowed retaliation, indicating that all US/UK interests are now legitimate targets. This raises fears of further escalation in the Middle East.

Customs data shows for the month of December, China imported 9.823 mmt’s of soybeans. This would be down 6.9% vs same month last year. Total imports for 2023 hit a record 99.4 mmt’s, up 11.4% from 2022.

Traders look for today’s quarterly grain stocks report to show Dec 1 corn stocks at 12.050 bil bu, vs 10.813 bil bu Dec 1 of 2022. Look for soybean stocks at 2.975 bil bu, vs 3.021 bil bu Dec 1 of 2022. Wheat stocks are seen at 1.387 bil bu, vs 1.312 bil bu Dec 1, 2022.

One of biggest questions for today is where USDA Brazilian soybean production number land at will. CONAB on Wednesday estimated the crop at 155.27 mmt’s. Traders have estimated USDA at 156.2 mmt’s.

Argentina’s weekly crop progress out last night showed a rather large jump in the good/excellent category; g/ex was seen at 51%, vs 42% last week. In turn, the fare decreased from 56% to 46%. Poor/very poor was seen at 3%, vs 2% the week prior.

Brazil’s federal government has updated the EF-170 railway project, Ferrograo, to enable environmental licensing. The rail would connect Mato Grosso to Para farther north, for the purpose of transporting grain.

Most of the US is still set to receive a blast of winter weather over the next 48 hours. Frigid temps of subzero will sink down to the Texas Panhandle, while the Northeast across the Great Lakes is forecast to receive up to a foot of snow, with more in some areas.

Showers fell Thursday across North and Central Brazil, with totals mostly under 0.5″. One location in Central MT reported 1″+. Rain also fell in MGDS and the south, with totals ranging from 0.2-1.75″. This rain was welcome following 3-4 weeks of dryness.

Have a great weekend!

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