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Grain Comments: 01-18-2024

Good morning.

Ag markets are again recovering from yesterday’s lower trade, as the back-and-forth continues. Fund managers continue to add to short positions, while end users/commercials appear to be mostly covered into March. A fundamental spark of any kind remains necessary to see a sustained move in either direction. Seasonals point higher from here into Spring. Corn futures are trading 1-2 cents higher, soybeans are 6-7 cents higher, and the Chi wheat market is down 1-2 cents. Products were mostly higher, with bean meal trading $1.50/ton higher, and bean oil trading up 25 points. Outside markets mixed/quiet, crude oil futures are 10 cents lower, the Dow Jones index is 20 points lower, and the US$ index is down 15 points.

Another night of Middle East headlines, with limited ag-specific breaking news. Crude oil futures seem to be losing interest in the tit-for-tat missile lobbing going on in the Arab world.

The US military targeted another 14 Houthi missiles overnight, bringing the recent known strikes to a total of 4. Central Command stated they were ready for launch and presented “an imminent threat to merchant vessels and US Navy ships in the region.”

These strikes were seemingly in retaliation for an attack on a US-owned vessel in the Gulf of Aden. The Indian Navy announced early Thursday they had rescued the crew of the vessel, following an attack late Wednesday.

Hours later, Pakistan sent drones and rockets into Iran, attacking separatist Baloch militants in a border province. Iranian media reported nine deaths. Pot still boiling…

This morning’s ethanol report is expected to show stocks of 24.471-25.4 mil bbls. At the high end, this would be largest stocks number since March 2023.

Production is expected to come in at 1.042-1.082 mil bbls. This vs 1.062 mil in the previous week.

China December ag import/export data showed corn imports for the month of December hit a record 4.95 mmt’s. Mostly from Brazil. Sep-Dec import total is currently on pace to exceed USDA forecast.

Q1 soybean imports are seen at 18.5 mmt’s, or down some 20% compared with last year. Lower imports seen due to reduced hog herd, lower crush margins, slower economy, and higher stocks from Brazil imports.

Cash corn in Brazil closed higher yesterday for the first time since Jan 5th, ending the week+ long losing streak it had been on. Premiums for both corn and soybeans in Brazil have evaporated in recent days.

South American rainfall was limited to mostly southern areas on Wednesday. Scattered showers of .1-.4″ were seen in MT. Forecast into Jan 1 was consistent with previous runs, with a slightly wetter bias for the North and drier bias for the South.

Temp swings occur in the US Midwest in the coming days, with frigid temps to return by the weekend, and then a sharply warmer pattern thereafter. Temps are seen reaching into the 40’s/50’s by late next week.

Have a great day!

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