- Chicago grain and oilseed futures have been back and forth through the morning, but have stayed higher through the latter part of the day. The overnight trade was accompanied with sharply higher volume, though trading through the day has not found the aggressive follow through buying, though price breaks continue to find end user demand, which has offered support. The midday weather forecast little change to the Argentine forecast out to mid-February. Chicago brokers estimate that commodity funds have been net buyers of 4,000 contracts in corn and have been flat for the morning in the wheat market. Funds were big buyers in soybeans overnight, but sellers of near 5,000 contracts through the morning. In soybean product markets, funds were also similarly large overnight buyers, but turned net sellers of 3,500 contracts through the day, and also sellers of 2,500 soyoil contracts. Despite funds selling through the day prices have managed to hold higher.
- Chinese buyers will go on holiday in 2 weeks, and the US$ index has bounced to start the week, and the dollar is also higher against key S American currencies. However, longer term bearish dollar trends are still in place, both on the index and against the Brazilian Real. For the Brazilian farmer, the rally in prices in Chicago has been bitter sweet, as those gains have been more than offset by changes in currency over the last several weeks.
- Crop loss will likely accelerate across Argentina in the next two weeks due to hot/dry weather and a high pressure ridge aloft. We have lowered our estimate of the Argentine soybean crop to 52 million mt with corn at 36.0 million mt. It is the availability of soybeans for processing/export which is our biggest concern should the Argentine soy crop be less than 49 million mt. Corn prices should follow soymeal upwards.