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Grain Comments: 01-22-2024

Good morning.

New week has started quietly at the CBOT, as ag futures have traded either side of unchanged in the overnight session. Soybeans began the night firm but have since drifted to slight losses. Middle East tensions continue to simmer, as news wires report some of the bloodiest fighting of the new year was seen in southern Gaza’s main city over the last 48 hours. Corn futures are unchanged to a half cent lower, soybean futures are 1-2 cents lower, and the Chicago wheat market is 3-4 cents lower. Products are mixed, bean meal is $3-4/ton lower and bean oil is up 25-30 points. Outside markets mostly higher, crude oil futures are up 30-40 cents, the Dow Jones index is up 70 points, and the US$ index is down 5 points.

Friday’s COT report showed managed money short some 456,000 contracts of CBOT grains, as fund managers continue to press short bets.

Funds are estimated to be short 260,542 contracts of corn, short 76,797 contracts of soybeans, and short 68,575 contracts of wheat in combined futures and options positions.

Chinese imports in the 2023 calendar year totaled 99.4 mmt’s of soybeans, 27.1 mmt’s of corn, 12.1 mmt’s of wheat, and 11.3 mmt’s of barley. Each of these categories were up significantly from 2022.

Israeli Prime Minister Benjamin Netanyahu rejected terms from Hamas for a new hostage deal over the weekend as the war in Gaza rages on.

Florida Governor Ron DeSantis ended his presidential campaign over the weekend, giving his endorsement to former President Donald Trump.

As the New Hampshire primary approaches this week, this leaves just Nikki Haley as the lone remaining challenger to Trump’s Republican nomination.

Friday’s cattle on feed report showed the US cattle herd up 2.1% vs a year ago, with traders expecting a rise of 2.2%. Placements were down 4.5% and marketings were down 1%.

South American weather again comes into focus this week, as crops in Argentina are beginning to see stress from heat/dryness. No rain is forecast for another 7 days, before a single storm event shows up this weekend.

Models continue to hint at better rain chances into February, but confidence at this point is lacking. A return to more normal rainfall is needed to finish above average Southern Brazil/Argentina corn and soy crops.

Mato Grosso into Southern Minas Gerais saw good rains over the weekend in North/Central Brazil, continuing to aid in crop development. Remember, these are the areas where irreversible drought damage occurred in November/December.

US Midwest sees active weather patterns this week, with temps seen rising to near 50 degrees in Central IL in the next 5 days. Moisture will be seen in the form of rain/snow/winter mix for another 3-4 days, before a drier pattern emerges in the 2-week period.

Have a great day!


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