The Lunar New Year begins today in Asia. Business has come to a screeching halt for the week. The year of the Tiger, by the way.
USDA announced yesterday morning soybean sales to China of 66,000 mts of old crop and 63,000 mts of new crop beans.
The Brazilian currency is called the “real”. Yesterday, the number of reals to buy a dollar declined 1.9%, which, in currency trading, is huge. Not only that, the number of reals to buy a dollar fell below 5.3 for the first time since September. This devaluation of the dollar versus the real was one of the major reasons beans were so strong yesterday as it made US beans comparatively cheaper than Brazilian beans. March beans settled at $14.70 Friday; 1.9% of $14.70 is 28 cents. On the high yesterday, March beans were up 27 cents and settled up 20 cents.
The other reason beans were strong yesterday was Dr. Cordonnier lowered his Brazilian soybean crop to 130 million mt and AgRural down to 128.5 million mt. The USDA is at 139 million. Several other less notable analytical firms are in the same area, but whispering that a sub 125 million mt crop is probably coning with the next round of estimates.
I am sure new highs in corn and beans after a big rally the past two weeks on corn and beans Sunday evening on the last trading day of the month prompted profit-taking.
Nothing like money to tell the truth. Just how poor is the soybean crop in Brazil? May/June soybean FOB offers for export from Brazil are barely lower than US soybeans for the same months. Usually, the difference is $1.25 to $2.50 a bushel lower.
Ethanol margins went into the red in Iowa on average yesterday. It is highly likely that ethanol plants have bought more corn in the recent months than they will now use as quickly as previously expected. It was just 8 weeks ago the ethanol crush margin was $5.08. Friday, it was $1.31.
When March corn traded to $6.42½ yesterday, it was two cents above the contract high made on May 7th and a double top on the charts, a technical sell area. Perhaps more importantly, that 6½ cents higher trade put the ethanol producers deep enough in the red, they weakened their corn basis bids in many Corn Belt areas. Even though March corn settled down 10 cents on the day, Poet at Iowa falls weakened their basis 2 cents.
The Lithuanian Railways said yesterday it will not transport any potash produced by Belarus state-owned potash producer Belaruskali until it receives government approval.
India announced their urea purchase tender. Offers due Feb 7. Shipment thru most of March. The tonnage they buy will depend on the price. Egypt sold urea yesterday at $725 per mt after dropping to a low of $640 last week. Granular urea barges traded yesterday as high as $650 per short ton FOB NOLA, a $140 rebound from last week's average barge price. Subsequent offers reached $660 FOB, but some sellers willing to do business at $645 FOB.
Carter Campbell is a technical analyst. He noted that the number of contracts of CBOT wheat traded (volume) in the one minute at the yesterday’s low was five times greater than normal volume. Therefore, it is probably an important low for several days or possibly weeks.
West Texas Intermediate Crude Oil (WTI) Crude oil is up 31 cents at $88.46 this morning.
The Dollar Index is trading at 96.59 down 0.05.
March palm oil is at 5,747 MYR, down 43 after making a new contract high today at 5,864 MYR. Friday’s contract high was 5,800 MYR. Palm oil has 32% and soy oil has 28% share of the world vegetable oil market.
March cotton yesterday upped $3.81 and settled at $127.57 per cwt after making a new contract high of $127.71. Cotton competes with soybeans for acres.
March Natural Gas is up $0.235 at $4.874 per Metric Million Btu. The contract high was made October 6th at $6.132 per MMBtu. Natural gas is the primary input cost of nitrogen fertilizer.
March Oats finished yesterday at $6.95½, up $0.20. The contract high is $7.78 made November 22nd.
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.2 inch of rain yesterday; 0 inch a year ago and 0.2 inch two years ago (one inch = 24.5 mm).
Yesterday's high temperature was 77°F. Day time highs the next ten days will range from 81 to 91°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 102°F with no rain. Cordoba high temperature 87°F with no rain. Salto high temperature 83°F with no rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 1.21 inches 83 to 98°F Cordoba 0.60 inches 80 to 94°F Salto 0.65 inches 77 to 97°F
The Western Corn has one more rain day than yesterday and the Eastern Corn Belt has three less rain days than yesterday.
Yesterday's weekly inspections for export strong for corn and beans as both were well over a million mt.
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of. The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.