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Grain Comments: 01-26-2024

Good morning and Happy Friday.

Markets are mostly lower across the board in the overnight trading session. Chicago wheat futures are the downside leader of the ag bunch, following higher closes on every day so far this week. Tradeable news remains pretty much the same as it has all week. Corn futures are 2-3 cents lower, soybean futures are 7-8 cents lower, and the Chicago wheat market is 6-7 cents lower. Products are mostly lower, soybean meal is down $2-3/ton, and soybean oil is mixed/unchanged. Outside markets are lower as well, following another day of near record highs in the stock market. Crude oil futures are 50-60 cents lower, the Dow Jones index is down 30-40 points, and the US$ index is down 30 points.

The Buenos Aires Grain Exchange released its weekly crop update overnight. Report showed corn planting had reached 97.2%, up 4.5% from last week.

G/ex ratings for corn were seen at 41%, down from 46% the week prior. Fair improved from 51% to 53%, and poor/very poor went from 3% to 6%.

Soybean planting was seen at 98.4%, compared to 97.1% last week. Good/excellent rating showed a significant decrease, going from 55% last week, to 44% this week. Fair was 48% vs 43%, and poor/very poor was 8% vs 2%. Recent heat/dryness is beginning to show in Argentine crop ratings.

Ethanol sales out of Brazil for the first half of January were up 44% vs same period last year according to industry data out yesterday. Mills report running out of storage space due to a bumper crop the year prior.

Barge shipments down the Mississippi River were down roughly 50% from the week prior in the week ending Jan 20. Soybean shipments were down 52%, and corn shipments were down 54%. This is mostly seen due to ice buildup, which is limiting traffic.

According to a UN agency, freight transiting the Suez Canal has dropped by 45% in the two months since the Houthis began attacking vessels in the Red Sea.

The Canal handles 12-15% of global trade and 25-30% of global container traffic. Container shipments were down an astonishing 82% from their early December levels.

Chinese officials have asked their Iranian cohorts to help in limiting the attacks by the Houthis in the Red Sea, or risk harming relationships with Beijing.

From one Iranian official, “Basically, China is saying: ‘If our interests are harmed in any way, it will impact our business with Tehran. So, tell the Houthis to show restraint’.”

The EU, GFS, and Canadian models all show chances for scattered showers in Argentina February 5-9; however, confidence this far out remains low.

Weather in Northern/Central Brazil remains the same as previous runs, with normal/above normal precipitation and normal/below normal temps into the beginning of February.

A ridge extending through Southern Canada will provide above average temps to most of the Central US into next week. Ridge also causes dryness in Central US.

Have a wonderful weekend!

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