** 6:30 AM CST CBOT Prices: January soybeans are down 7.25 cents at $9.825, March corn is down 1.75 cents at $3.51, and March Chi wheat is down 5.0 cents at $4.14.
** AgResource AM Grain & Oilseed Comment: Good Morning! A steady opening produced new selling in CBOT soybeans on the prospect of more normal Argentine and Southern Brazilian rainfall in the 9-15 day period. And the USDA December Crop report is tomorrow with long liquidation being featured.
The volume of CBOT trade has been rather normal with just over 17,000 contracts of January soybeans, just over 11,000 contracts of March corn, and just over 9,500 contracts of March Chi wheat changing hands. ARC noted that wheat has scored a new round of contract lows.
CBOT open interest data for Friday reflects a 1,857 contract decline in corn, a 725 contract gain in soybeans, and a 6,605 contract bump in wheat.
December CBOT deliveries reflected 285 contracts of wheat, 8 contracts of oats, 39 contracts of corn, 121 contracts of soyoil, and 192 contracts of soymeal. CBOT December futures cease trading on Thursday.
Dry/hot weather stressed Argentine & S Brazilian crops on the weekend. A few showers fell in SW Argentina with totals to .35”, but the rest of the area was dry with high temps ranging from the mid 80’s to the lower 100’s. Over 93% of the Argy crop areas were dry over the past 30 days with budding heat adding crop stress. 28% of the Brazilian crop areas also endured less than normal rainfall and the area developing a short soil moisture profile.
This week’s forecast maintains arid weather conditions with warm to hot temps with widely scattered showers to develop late in the weekend and early next week for Argentina and the southern third of Brazil. Initially, the rains are not expected to be large or widespread, but the extended range forecast keeps calling for more normalized rainfall in the 9-15 day period.
The market appears to be taking this chance of better rains in the extended range to heart, but one has to be careful to pay close attention to the forecast to make sure that the projected rains drop next week. Amid the ongoing La Nina, if the rains don’t fully develop, a violent rally would unfold heading into the end of the year as weather risk is priced back in.
Regular and sometimes heavy rains are slated to drop across the northern 2/3’s of Brazil for the next 2 weeks. The rains will maintain wet soils and favorable growing conditions. Crops here are said to be preforming nicely.
Dalian soymeal and corn futures closed mixed and did not follow Chicago overnight. China’s food inflation actually fell 1.1% on the year which will allow China to regulate its massive debt.
Malaysian palmoil closed down 22 ringgits to 2,457 RM/MT on large supplies, bearish technical considerations and a monthly stocks report Tuesday.
South American weather concern is being downgraded with rains next week. Our advice is not to become bearish with much of 17/18 growing season ahead.