** CBOT 6:30 AM CST Prices; March soybeans are down 2.00 cents at $9.6175, March corn is up .50 of a cent at $3.495, and March Chi wheat is up 1.50 cents at $4.3375.
** AgResource AM Grain & Oilseed Comment: Good Morning! The CBOT overnight trade has been mixed (again) with a modest uptick in volume. Following Tuesday’s trend, the grains continue to gain on soybeans and soyoil is gaining on meal. Traders are awaiting Thursday’s Brazilian crop estimates from CONAB and the USDA January Crop report on Friday. ARC looks for a mixed trade today.
January CBOT deliveries were; 99 contracts of soymeal, 140 contracts of soyoil, and 21 contracts of soybeans.
Wednesday’s change in CBOT open interest featured a gain of 1,234 contracts in corn and 3,639 contracts in soybeans, with wheat OI down 722 contracts.
The US Dollar is technically weak breaking out of a bearish chart pattern to the downside while some long time interest rate pundits claim that the 20 year old bond bull market has come to an end. The acceleration of US and world economic growth is likely to force world Central Banks to be more aggressive in raising interest rates in 2018.
World ag currencies have the Russian ruble at 57:1 USD, the Argentine Peso is priced at 18.9:1 and the Brazilian real at 3.24:1.
The Midwest influence grows in the Senate Ag Committee with two new members – Debra Fisher (R-Nebraska) and Tina Smith (R–Minnesota). Both will help in the debate of the 2018 US Farm Bill that is due up to be passed in September. And the Washington tax debate continues as the Trump Tax Bill offered co-ops a 20% tax advantage over more traditional businesses. This has some grain merchandizers wondering if co-ops will be willing to pay more to farmers for their grain? And in the case of CBOT deliveries, they are managed by existing large multinational grain companies, can these companies originate grain effectively to keep delivery points well supplied to maintain convergence between cash/futures. These points are all being debated behind closed doors with multinational grain companies calling the co-op tax treatment “unfair”. Malaysian palmoil futures closed 24 ringgits higher at 2,621 RM/MT. Malaysian December palmoil stocks rose by 7% to 2.7 MMTs with exports up 4.9% to 1.4 MMTs and production down 5.6% to 1.8 MMTs.
Paris March wheat futures are unchanged at $161.50 euros/MT with Dalian soymeal and corn prices closing mixed and little changed.
The US and EU weather models are apart on their South American weather forecasts with the GFS likely too wet. The often more correct EU model calls for lite rain chances for the southern third of Argentina and a drying trend for the northern half of Brazil over the next 2 weeks. Any heat will be focused on Argentina where crop stress is on the increase.
It’s the market’s reaction to Friday’s USDA report that will key future CBOT price direction. South American weather forecasts are far from perfect.
