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Grain Comments: 01-25-2024

Good morning.

The CBOT ag markets have seen small ranges and low volume so far in overnight trade. Markets continue to climb back from severe oversold conditions amid a general lack of fresh news. South American crop production, as well as developments in Gaza and the Red Sea, will continue to key price direction into February. Once a better handle is had on South American corn and soybean production, trade focus will shift to the Northern Hemisphere spring planting season. Corn futures are unchanged to a half cent lower, soybean futures are unchanged to a half cent higher, and the Chicago wheat market is unchanged to up a penny. Products are mixed, soybean meal is up around $2/ton, and soybean oil is down 5-10 points. Outside markets are mostly higher, crude oil is trading around 75 cents/bbl higher (and its highest level since late Dec), the stock market is up fractionally to mixed, and the US$ index is unchanged.

Today will likely be a macro trade day, as a slew of economic data is due to be released this morning. Analysts see US Q4 GDP cooling to an annualized 2% rate, following the summer boom.

Stock markets have been perched at or near record highs for most of this week, so today’s data will be closely monitored.

Fresh ag-specific news is lacking, as traders continue to debate Brazilian soybean crop sizes, as well as the impact from current Argentine dryness.

Cash corn in Brazil closed higher for a second day in a row Wednesday, following the dramatic slide of the past couple weeks.

Farmers in France and Eastern Europe have continued protests for a second day, fighting mostly against taxes and other government policies.

This morning’s weekly export sales report is expected to show 725k-1.4 mil mt’s of corn, 700k-1.2 mil mt’s of soybeans, and 200k-625k mt’s of wheat. These would be fairly routine numbers for this time of year.

Corn market open interest continues to rise, increasing almost every trading day so far in 2024. End users have used the break of the past 6 weeks to extend coverage, while managed money continues to build their short position.

Soybean exports out of Brazil are seen reaching 2.3 mmt’s in January, compared to 0.94 mmt’s in the same month last year. Corn exports were seen reaching 3.86 mmt’s, vs 4.86 mmt’s same month a year ago.

SovEcon forecasts Russian wheat production to reach 92.2 mmt’s for the 23/24 season, up nearly 1 mmt from their previous estimate. This would mean export potential for 24/25 remains over 50 mmt’s.

Weather forecasts have stagnated, as Brazil continues to see normal rainfall and average temps in the North, while the South into Argentina remain below normal rainfall and above average temps. Argentina weather increases in importance in the coming 10 days.

Have a wonderful day!


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