** 6:30 AM CST CBOT Prices: January soybeans are down 1.50 cents at $9.525, March corn is up .50 of a cent at $3.4975, and March Chi wheat is up 1.00 cent at $4.245.
** AgResource AM Grain & Oilseed Comment: Good Morning! Low volume and mixed has been the CBOT overnight with traders preparing for the last full day of trade before Christmas. The CBOT will close at 12 Noon on Friday and reopen on the morning of December 26th.
Much of the CBOT trade this week has been based on technical considerations with funds shedding about half of their length in soymeal, while going net short soybeans and soyoil. Funds are carrying a record large pre-Christmas short in corn and wheat – and both grains have accordingly rallied.
Fundamentally, it’s difficult to agree with spot CBOT soybeans below $9.50 or soyoil below $.33 amid ramped-up US biofuel demand and the heart of the South American growing season being just ahead. Non US corn fob prices are rallying and activity in the Black Sea is starting to be severely constricted ahead of the New Year. It looks to be another two sided trade with US export sales offering some interest as US export demand has been ramping up of late.
The projected late week rains have started to fall across the southern portions of Argentina overnight. Rainfall amounts of .25-1.00” have been recorded in S Cordoba and W Buenos Aries. Rain chances are projected to shift northward for another 24 hours with additional totals of .25-1.25”. This is the best chance that Argentina will have for rain for the next 10-12 days with heat returning next week with highs in the 90’s to lower 100’s. Dry weather is forecast for much of next week across Argentina with some lite rains due in the closing days of 2017. The warm temps look to hold into 2018.
The Northern Brazilian forecast features drier than normal weather for the next 10 days with heavy rains slated to drop across SC Brazil with Parana to endure rains of 5-8.50”. Rains should reach RGDS in S Brazil late Friday and Saturday with totals of .25-1.50”. Improved rains look to drop across N. Brazilian crops in the 11-15 day period as the south dries out. No extreme heat is noted for Brazilian crops for the next 10-12 days.
Malaysian palmoil futures fell to fresh lows as large stocks and technical selling. February BMD futures closed down 49 ringgits at $2,428RM/MT. However, a seasonal decline in palmoil production lies ahead and world vegoil demand remains robust. It’s late to be turning bearish of palmoil, but the weakness in palm pressured CBOT soyoil overnight in sympathy selling. At some point in the near future, US soyoil should decouple from palm on heady domestic biofuel demand and the rapid tightening of US soyoil stocks.
Other fresh news is limited overnight with the US dollar firmer. China is changing their soybean purchase contracts for US soybeans to reflect 1% and 2% rates of foreign matter with USDA certification of cargoes at 1% or below.
We await CBOT rallies for fresh sales amid oversold CBOT soy/grain futures. This is no place to put on new net short CBOT positions.
