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Grain Comments: 01-31-2024

Good morning.

A lower overnight session gave way to sharply higher trade by the close yesterday, however markets have so far been unable to follow through and have started Wednesday again lower. Corn futures are 1-2 cents lower, soybean futures are 7-8 cents lower, and the Chicago wheat market is also 7-8 cents lower. Products are mostly lower, soybean meal is around $1/ton lower, and bean oil is down 40-50 points. Outside markets are mixed, crude oil futures are down 70-80 cents/bbl, the Dow Jones index is up 20-30 points, and the US$ index is up 10 points.

Lower trade in the ag’s overnight, as follow through has not been seen from yesterday’s higher close. Reversal patterns technically are a step in the right direction, but little else was accomplished in terms of taking out resistance levels.

All eyes/ears in the financial world today will be focused on this afternoon’s Fed meeting minutes, and subsequent speech from Fed chair Jerome Powell.

Rates are expected to stay unchanged today, but investors and economists will be closely watching Powell’s speech for any signs of rate decreases coming in March. Investors currently see a 40% chance at a rate hike coming in the next meeting.

The International Monetary Fund (IMF) yesterday raised its forecast for global growth this year to 3.1%, citing better than expected expansion in the US and fiscal stimulus in China. This is up from 2.9% in its October forecast.

Hamas leaders continue to study a new ceasefire proposal presented by mediators following talks with Israel. The proposal appeared to be the most serious peace initiative that had been seen in the now months-long war.

US ag attaché in Ukraine increased corn and wheat export estimates Tuesday for the 23/24 season, due to higher production forecasts for both grains. The report also lowered ending stocks for all grains compared with their October estimates.

China January PMI seen at 49.2, compared with 49.0 in December, but still below 50, which is the level needed to show expansion. This also weighed on prices this morning.

Today’s ethanol report is expected to show production for the week ending Jan 26 at 964,000 bpd, compared to 818,000 last week. Stocks are seen at 25.448 mil bbls, compared with 25.815 mil last week.

Extended range forecast continues to gyrate, with last night’s runs again increasing rainfall chances in Argentina beyond February 9th. Confidence remains low. Another 8-9 days of heat/dryness is seen until then, as stress builds. Northern Brazil forecast remains favorable.

The US Midwest continues to see above average temps and below average precipitation into the second week of February.

Have a great day.

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