- Chicago values are mostly lower in a dull medium-volume session. March soybeans have failed to hold support at its 50-day moving average. There are still hints of scattered showers in Central Brazil next week, though the overall S American upper air flow shows no major change in the next 2-3 weeks. Key thereafter will be whether longer term climate guidance maintains a more normal pattern of precipitation and temperatures in Brazil beyond the opening days of February.
- President Trump is attending today’s Farm Bureau meeting in New Orleans. It is expected that Trump will talk positively about ongoing US-China trade talks, of which there’s been little concrete news recently, though the government shutdown has obstructed implementation of the 2018 Farm Bill as well as government aid payments.
- Chinese soybean imports in December totaled 5.7 million mt, down 40% from the prior year and vs. expectations of 6.0-6.5 million. Imports will rebound substantially in the near term amid recent purchases of US origin. But it is the annual decline in import demand growth that continues to weigh.
- Russian interior wheat prices are steady/slightly higher than what was reported in late December. Of note, domestic wheat prices across the Urals and Siberia continue to advance as importers are forced farther inland for supply. Russian flour prices have hit new seasonal highs.
- US export inspections through the week ending Jan 10 included 40 million bu of corn, vs. 20 million the prior week; 39 million bu of soybeans, vs. 25 million the prior week and a 7-week high; and 20 million bu of wheat, vs. 10 million the previous week. For their respective crop years to date, the US has shipped 767 million bu of corn, up 61% from last year; 496 million bu of wheat, down 11%; and 676 million bu of soybeans, still down a hefty 40% from this week a year ago.
- The Central US forecast at midday is drier (snowfall has been reduced significantly) but colder into Jan 30. Deep low pressure settles in aloft the N Plains and Great Lakes beginning Jan 22. The first prolonged period of bitter cold weather is expected. Low temperatures across the Delta wheat belt (where snow will be lacking) will be monitored. Stress on livestock will stay elevated.
- Chicago brokers estimate that funds have bought a net 1,000 contracts of corn, and have a sold a net 2,500 contracts of wheat and 4,000 contracts of beans.
- In S America, the GFS weather forecast at midday is little changed from the morning run. Near complete dryness will stay intact across a majority of Brazil’s ag belt into Saturday. Scattered shower activity moves north on the weekend, with decent totals (1-2”) offered to Parana, Mato Grosso do Sul and Sao Paulo next week. Rains do look to fall, but a pattern of below normal precipitation is sustained across Central Brazil into Jan 23.
- The market needs yield, stocks and export data to establish a new trend. In the meantime, we doubt the bulls or bears can find much leverage amid the need for rain in Brazil and ahead of the Chinese delegation’s visit to the US at the end of the month. There is still no sign that the US Government will be funded this week.