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Grain Comments: 01-17-2024

Good morning.

More of the same in the overnight markets at the CBOT. Soybeans are the anchor this morning, with the grains trying to not get tugged along. Relatively quiet nights in the Middle East have led to small-range trading so far in the outside markets. Crude oil gapped lower to start last night, possibly in tandem with nat. gas, due to coming warmer temps in the days ahead. Corn futures are 2 cents lower, soybean futures are 6-8 cents lower, and the Chi wheat market is trading 1-3 cents higher. Products are lower, bean meal is down $1/ton and bean oil are down 50-55 points. Crude oil futures trading roughly $1.30/bbl lower, the Dow Jones index is down 115 points, and the US$ index is unchanged following yesterday’s sharply higher trade.

Breaking news is absent for the most part in overnight trade; ag markets continue to consolidate following Friday’s USDA data.

The Rosario Grains Exchange, in a report yesterday, said they see a very good chance that both Argentina’s corn and soybean crops could be larger than current forecasts. The group currently predicts soybean output for Argentina at 52 mmt’s, and corn output of 60 mmt’s.

This continues to be the number one reason why soy prices are not rallying based on Brazil crop loss. Feb weather in Argentina is similar to August weather in the US for soybeans, so the next 5 weeks remain critical. As of now, Argentina has made up the loss in Brazil for the most part.

Israeli airstrikes reportedly killed 9 Palestinians in two areas of the occupied West Bank overnight. The Israeli military described 5 of the 9 as militants suspected of planning an imminent attack.

Shipping companies Hapag-Lloyd and Maersk announced on Wednesday they would be forming an alliance expected to start in February of 2025.

The new venture, labeled “Gemini Cooperation”, will replace participation in THE Alliance for Hapag-Lloyd; and will replace Maersk’s 2M link with MSC. The companies say they are pursuing new strategies to secure market share in the changing requirements of the post-COVID world.

Maersk CEO Vincent Clerc also said Wednesday he sees the disruption to global shipping caused by attacks in the Red Sea lasting at least a few months. Clerc sites the situation’s unpredictability as a difficulty in planning for the short-term.

Ukraine says it shot down 19 of the 20 Shahed drones launched by Russia overnight, which targeted the port city of Odesa. Ukraine’s military said the attack targeted Odesa and other port areas for at least three hours.

China’s Q4 GDP was seen growing to 5.2%, vs 4.9% in Q3, and analysts forecasts of 5.3%. While this was slightly better than official estimates for the year, it was far shakier than many investors had expected. China’s stock market was down roughly 2% Wednesday.

The US deep freeze is seen getting a small reprieve in the coming days as temps are seen reaching back into the 20’s, before cooling off again into the weekend. 2-week forecast shows temps getting back above average by the end of the month.

Spotty showers dotted NE Argentina on Tuesday, but otherwise moisture was absent in South America. Argentina needs a return to more normal rainfall by February. Concern at this point is minimal.

Have a great day!


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