Mar corn -1 at 5.49
Mar beans +1 ¾ at 13.74
The DOW is UP
USD is Down
Crude oil +.66 at 56.89
Overnight grain markets were mixed with beans firming headed into the biscuit break in what has been a two-sided session so far. The bull spreads in beans and meal are soft which is not an encouraging signal for the bull. The USDA reported a fresh daily sale of 102 tmt old crop corn to unknown.
In the product trade, soybean meal is higher and oil lower with meal gaining slightly in the oil share spread. Board crush margins are a couple pennies lower to 72 cents/bushel. Malaysian palm oil closed +1.75% to help salvage a brutal start to the week and limit the weekly loss to -.53%.
A drier weather forecast has returned for Argentina the next couple of weeks. Recent rains have likely bought the central to northern regions time to get through another dry stretch but the drier southern growing areas in parts of La Pampa and Buenos Aires should see increasing stress. In Brazil, there have been challenges but it appears a record soybean crop is on its way with the only question being how far back the harvest delays will push back shipments of new crop. The delays keep the window open for dwindling US supply as the only near term alternative for world buyers. China’s public holiday for Lunar New Year is Feb. 12-17. 2021 will be the year of the Ox – at least it’s not the bat.
The USDA crop report is Tuesday. This report carries more importance than normal for a Feb report due to the dramatic tightening in the S&Ds over the past 5 months. It will be an opportunity to bring the soybean bull stat realities back to the forefront where momentum has stalled since making new highs following last month’s crop report. Soybean prices have yet to discourage export or domestic crush usage according to data up to this point. We anticipate the ongoing tightening trend of domestic and world corn, wheat and bean stocks to continue, ranges and avg. trade estimates are shown below.
Overnight, the trend toward a quieter market continued; this time, just a three cent range, finishing steady to a penny weaker by the morning pause. Heading into “Big Friday”, the corn market is clinging to a three cent weekly chart gain, and is hanging-out in the middle-high end of a 21 cent range. The prior week’s 46+ cent higher finish appears to have priced in that period’s surge in China export buying, and understandably, that is a tough act to follow. News-flow has been much stingier this week, and the 8 AM sales flow lighter. To wit, there was another 101,600 metric tons of corn booked to “unknown” today. South American weather remains favorably mixed, though there have been a couple new data points to chew on. The BAGE trimmed Argy corn 1 mmt from prior forecasts to 46 mmt (USDA at 47.5), despite raising crop conditions wk/wk. This morning, Datagro maintained a 110 mmt full year Brazil corn crop forecast. Second crop (which is the largest and contributes the most to the country’s exportable surplus) is just being planted now in a few areas, slightly behind schedule. There was another trickle of corn business overnight; NOFI was in for a cargo of optional origin supply, paying just over $290 C&F with fees. Outside markets are in a positive mode to start the day; stocks/crude up, dollar down. The next monthly USDA S&D update (WASDE) is Tuesday (2/9).
Darren, David, and Elizabeth