- Chicago markets closed mostly lower with soybeans leading the way! China’s Dalian market saw overnight weakness in soybean meal and corn on account of avian influenza concerns and funds followed the trend. The drop coincides with another week of solid US exports and the funds have added to new short positions in the grains whilst liquidating soybean length. The market has a refreshed bearish feel although US soybean export sales at record large levels and some concerns over NE and NC Brazil will likely prevent an out and out return to bearishness. Also, bear in m ind we have just seen the third day of fund selling in the grains, and this is generally as far as fund selling extends – unless tomorrow proves different!
- Weekly customs export data shows EU wheat exports of 804,900 mt, which brings the season total to 12.987 million mt. This is 240,564 mt (1.8%) behind last year. Barley exports for the week reached 115,279 mt, which brings the season total to 1.997 million mt, which is 3.5 million mt (73.8)% behind last year.
- January is the most important month for S American crop production of the year. We would not want to be a seller of summer row crop futures until more is known about the 2017 Brazilian and Argentine yield potential. January soybean futures should target the $10.00 strike heading into option expiration on Friday. This is not a normal S American weather pattern and has to be closely watched. Our view is not to sell the three day drop in corn!