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Grain Comments: 01-29-2024

Good morning.

CBOT markets have started the last week of the month lower, as rain prospects continue to linger in the 10-day time period for Southern Brazil and Argentina. Tensions in the Middle East remain, with new attacks over the weekend. Corn futures are 3-4 cents lower, soybean futures are 6-8 cents lower, and the Chicago wheat market is 9-10 cents lower. Products are lower, soybean meal is roughly a dollar/ton lower, and bean oil is down 40-50 points. Outside markets are mostly higher, crude oil futures are up 10-20 cents, the Dow Jones index is unchanged, and the US$ index is 10-20 points higher.

Headlines are again dominated by news out of the Middle East to start Monday, as the last 48 hours saw an attack on US troops, as well as an oil tanker carrying Russian oil hit by a missile fired by the Houthis.

Friday afternoon, a Trafigura oil tanker carrying Russian oil was attacked and struck by a missile in the Gulf of Aden. This was the first major attack on an energy-supplying vessel.

This also goes against the theory that many believed Russian assets in the area would not be targeted, due to the countries ties with Tehran. Crude oil futures were up some $1/bbl on their highs last night.

In a further escalation, three US troops were killed in a drone attack on a base in Jordan. Some 30+ additional service members had been reported injured.

US President Biden said in statement, “While we are still gathering the facts of this attack, we know it was carried out by radical Iran-backed militant groups operating in Syria and Iraq.” Iran claims it had no involvement in the attacks.

French farmers continued to protest Monday, as the government has said it hopes to ease European Union environmental regulations on fallow farmland by the end of this week, following a dropping of plans Friday to gradually reduce state subsidies on diesel fuel.

Farmer organizations Friday said the steps that had been taken were “not enough,” and that pressure would be stepped up.

In a further deterioration of China’s economic confidence, embattled property giant Evergrande was ordered to liquidate by a judge over the weekend. The world’s most indebted developer has failed to offer a concrete restructuring plan more than 2 years after defaulting on its loans.

Friday’s COT report showed managed money traders are now short a combined 231,744 contracts of corn futures and options; short 105,270 soybean futures/options; and short a combined 47,416 contracts of wheat futures/options.

Rainfall for Southern Brazil and Argentina continues to be seen in the 10-day forecast, but temps have increased over the weekend to near 100 degrees on a daily basis for the remainder of this week.

Northern Brazil continued to see good, wide-spread showers over the weekend. These rains will begin to move South by the end of this week.

The US Midwest looks to see temps that are above too much above average for this week and most of next. This, combined with good rainfall and fog, will help to eat away a lot of the current snowpack.

Have a great day!

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