|Grains are higher this morning. Soybean futures and products are seeing a continuation of the recent rally as meal futures have led the recent charge, now trading at 5-week highs while nearby bean futures are at a 3-week high. Corn and wheat futures are higher but remain in a sideways pattern. Nearby WTI crude is sharply higher in the early trade, nearing $90 again for the first time in 3 weeks. The equity markets are lower, and the dollar index is nearly unchanged.
The recent strength in the grain markets can be attributed to a number of factors that are showing signs of improvement. The interior cash markets have shown improvement domestically. Export demand is improving; US corn is becoming more competitive with Brazilian corn and China has been buying world (including US) wheat and soybeans. The seasonal pattern for soybeans has also turned bullish as the US harvest gets put to rest. Lastly, weather conditions in South America remain uncertain as dry conditions could delay soybean plantings. Argentina corn is no longer being quoted for Feb delivery soybeans over planting delay concerns.
China YOY GDP came in higher than expected at 4.9%
President Biden is in Israel this morning, pledging solidarity to Israel’s war against Hamas while backing the account that the blast that killed a huge number of Palestinians at a Gaza hospital was caused by militants.
In Iraq, the US military successfully stopped a drone attack on its forces, the first such attack on US forces in Iraq in more than a year. The US is declining to say who the attackers were, but Washington is on alert for increased activity by Iran-backed forces due to tensions in the Middle East.
The weather outlook for Brazil remains on the drier than normal side for the central and northern regions of the country although scattered showers are possible into the weekend. Temperatures will remain above normal through the weekend.
The outlook for Argentina is more of a mixed bag with increased shower activity today while another round of showers is possible this weekend for Southern Buenos Aires and La Pampa. Temperatures are expected to warm to above normal by this weekend.
The US weather outlook may be turning more active into the early/middle part of next week. 1-3″ rains are possible for MO, IA and IL and into the Great Lakes region according to the EU model. The GFS model has pushed these rains northward into the Dakotas and MN.
Malaysian palm oil prices were up nearly 1% during the overnight.
S&P Global sees US wheat acres in 2024 declining 875k from 2023 but left their revisions unchanged from their September report.