March corn up 1 ½ at $3.815

March beans up 3 at $9.215

The DOW is up

USD is weaker

Crude oil up $1.44 at $51.22

Good morning,

Corn traders continue to debate South American weather and Chinese buying intentions. Bears argue that the weather in both Brazil and Argentina is mixed. Meaning some areas are much better than expected and some are battling more extreme conditions. It’s obviously way too early to impact second-crop corn, but bulls can argue that producers in Brazil won’t make the investment to plant corn if soils are too dry or they fear losing their investment or seeing no ROI.  The market has currently rallied about +30 cents from the mid-September lows. The short term trend is positive.  Stable action over 381.75 would fuel a run towards 390.  A close under 376.5 alerts for a change in outlook.  Short, system types will find buy stops around 384.5.  Options are pointing to a 376.75-387.25 trading range this week.

Soybean bulls continue to closely monitor South American weather. At the same time, some dry areas in Brazil have become a bit more concerning. The government shutdown has left many in the dark regarding export demand. Most source inside the trade are talking about 4.5 to 5.5 MMTs of Chinese buying. Bulls are hoping the recent Chinese buying will equate to the USDA bumping their U.S. export estimate higher by +100 to +200 million bushels. Throw in a bump higher for the U.S. crush estimate and a lower adjustment to the U.S. yield and we can argue a less bearish balance sheet. Rather than talk of perhaps a +1.0 billion bushel ending stock estimate the trade is talking about an ending stock number sub-800 million. In fact, some of the bigger bulls are talking about ending stocks perhaps falling to sub-700 million bushels on larger than anticipated Chinese buying. We should note, it was extremely interesting to see China approve the import of Pioneer’s brand Qrome products and Enlist E3 soybeans and Callisto tolerant soybeans. I’ve heard that Enlist has been trying for years to get approval, for China to approve them now certainly seems like a bigger step in the right direction. Reuters reported that other newly import approved products included BASF’s RF3 canola and Bayer-owned Monsanto’s glyphosate-tolerant MON 88302 canola, and the SYHT0H2 soybean developed by Bayer CropScience and Syngenta but now held by BASF. Remember, China does not allow the planting of genetically modified food crops, but imports of GM crops such as soybeans and corn for animal feed are fine. The short term trend is positive but the market is overbought.  Stable action over 917.75 would fuel a run towards the low-940 area.  A close under 909.5 alerts for a change in outlook.  Short, system types will find buy stops around 925.75.  Options are pointing to a 907.5-934.5 trading range the rest of the week.

Soybean sales have been held up as an example of successful EU-US trade cooperation, despite the fact that the increase in U.S. imports has been largely attributed to lower prices. Since July, U.S. soybean imports to the EU have more than doubled compared to the same period in 2017 according to the EU Trade Commission. In the coming weeks, the EU’s executive expects sign-off on a proposal to authorize US soybeans for the production of biofuels, a move that is bound to further boost US imports, the commission said in a statement. The EU imports around 14 million tons of soybeans annually for livestock feed and milk production. Most imports previously came from Brazil. (Source: Reuters)

The USDA has extended the deadline for farmers hurt by trade wars to apply for aid payments as the partial shutdown of the federal government drags on. The deadline, originally set for Jan. 15, will be delayed for the number of business days that USDA offices are closed. FSA offices all across the country stayed open as long as possible, but the funding has finally run out and they have shut the doors.

EPA officials had planned on a February proposal and a May completion date for a rule that would open up year-round sales of gasoline containing 15% ethanol (E15) under the federal Renewable Fuel Standard (RFS). Along with that, the EPA was writing a new rule to provide more transparency in how biofuel compliance credits called Renewable Identification Numbers (RINs) are traded. Now it looks like both could be pushed back as the government shutdown carries into its third week.