The USDA reported yesterday morning China cancelled a previous purchase of 380,000 mts of old crop corn. Some speculate China will simply shift the same tonnage to new crop while others say China is up to their pre-Trump antics of market manipulation by cancelling a large purchase and then buy twice as much at a lower price after the market moves lower on the news.
Old crop soybean futures settled lower yesterday for the first time in 7 days. New crop Nov beans made a new contract high at $13.99¾ and settled 3 cents higher on the day at $13.92¾. The market’s attitude seems to be the South American (SA) production problems are serious, but may not be getting any worse. If so, the remaining question is just how low are the production numbers? That answer is more than two months away.
Soybean harvest is progressing well in Mato Grosso, but the pace was slower than expected last week due to pesky showers in several regions. Quality concerns are also more frequent.
Argentina’s soy production was reduced to 42 million mt by the Buenos Aires Grain Exchange (BAGE). The USDA is at 46.5 million.
Basis was steady yesterday at the Gulf for corn and soybeans.
JBS USA has agreed to pay $52.5 million to resolve a class action antitrust lawsuit brought by direct purchasers alleging the company conspired with other processors to suppress competition in the market for case-ready and boxed beef.
USDA’s drought report showed 69% of US winter wheat in moderate or worse drought, with 80% of Kansas in drought.
Wright on the Market IT guys, Nick and Eugene, have developed the software to collect, measure and then allow them to report every week what percentage of respondents are bullish, neutral, or bearish corn, wheat and bens. They will report every Tuesday night what the results of the poll were for the past week. We ask you to vote every week, but only once per week.
GrainStats.com has been doing a similar poll for several years and that is what I have been reporting to you every Wednesday. Unfortunately, only about 60 to 64 people respond to that poll. We hope we can get thousands of people voting every week. That will be valuable info!
Please share this link with anyone and everyone who cares about grain prices. Click on this link and vote now!
Soybean meal sales were a marketing-year high on yesterday’s weekly export sales. Note the report and tacker percentages on the chart :
The US dollar index was lower for the fourth consecutive day, down 1.95 since Friday. That is a huge decline. The weaker dollar sent crude oil well above $90 a barrel.
A Tech Tidbit from the Tech Guy provided the daily chart of the US dollar below. He translates what the market is telling him:
This is a pattern called (double) fakeout/shakeout - a trading range with failed then successful breakouts. As you can see, sellers tried to take it down in January only to fail temporarily. The buyers took it back up through the entire range attempting an upside breakout which also failed.
Sellers likely proved stronger here and reversed trade again back through the range. We should see a new downtrend for weeks or months to come which will support US grains. A couple more down days should seal it. Keep your eye on this chart moving forward. I will post a weekly chart in the future
Markets are opposing energies always at play - longs and shorts. Trends develop and sustain when one part of the energy overcomes the other.
West Texas Intermediate Crude Oil (WTI) Crude oil is up 44 cents at $90.71 this morning.
The Dollar Index is trading at 95.29, down 0.09.
March palm oil is up 30 MYR at 5,693 MYR. The contract high was made January 31st at 5,864 MYR.
March cotton is up 70 cents per cwt at $128.32. The contract high was made February 1st at $129.37. Cotton competes with soybeans for acres.
March Natural Gas is down $0.018 at $4.870 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 are up $0.02 at $7.30¼. The contract high is $7.78 made November 22nd.
Rondonópolis, Mato Grosso, in the heart of Brazil's most productive soybean area, received 0.7 inch of rain yesterday; 0.6 inch a year ago and 0.1 inch two years ago (one inch = 24.5 mm).
Yesterday's high temperature was 85°F. Day time highs the next ten days will range from 83 to 93°F (100°F = 38°C). Yesterday, in the dry areas of South America: Santa Maria high temperature 105°F with no rain. Cordoba high temperature 85°F with 0.1 inch of rain. Salto high temperature 85°F with 0.1 inch of rain. Total rainfall and temperatures expected in the next ten days: Santa Maria 0.62 inches 80 to 95°F Cordoba 0.37 inches 75 to 93°F Salto 0.41 inches 75 to 93°F
The Western Corn Belt has no rain days same as yesterday and the Eastern Corn Belt has one less rain days than yesterday.
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.