Written Commentary
CORN
Prices were fractionally lower with spreads little changed. Mch-26 held just above its 50 day MA while at about the midpoint of its 2 ½ month range of 44.35-$4.55. South Korea’s MFG reportedly bought 271k mt of optional origin corn for April-May shipment. Three 68k ton cargoes were purchased just under $250/mt CF with 1 cargo priced $1.89 bu. CF over Mch-26 futures. In addition the Korean Feed Association bought 68k mt of feed corn for April shipment also just under $250/mt CF. The BAGE reports Argentine corn plantings have reached 89% vs. 92% YA. 75% of the crop is rated G/E, down from 82% LW however well above 46% YA. Historically there has been a lean towards higher prices in reaction to the January USDA reports. Since 2000 March corn has closed higher 58% of the time on report day. Reuter’s surveyed est. at the end of the written commentary. Without bullish data from the USDA on Monday, which would likely in the form of lower than expected US production.
SOYBEANS
Mostly higher trade across the complex with beans steady to up $.01 ½, meal was up less than $1, while oil was up 20-25 points largely in sympathy with higher energy prices. Spreads were mixed and little changed. Mch-26 beans drifted back toward session lows at the close after failing to trade above this week’s high of $10.70 ½. Mch-26 oil held just below the top end of its $.48-$.50 range. Mch-26 meal continues to chop around its 100 day MA. While no new flash sales to China the USDA did announce the sale of 198k tons (7.3 mil. bu.) to an unknown buyer. While cash sources suggest China was again actively buying US soybeans today, prices have become less sensitive. Purchases will likely come to a screeching halt once 12 mmt are reached given Brazilian offers continue to run 60-80 cents below US offers thru April-26. Question then becomes when will these all be shipped ? When or will China start buying US beans for 26/27 as they have not confirmed the Trump Admin. claim they’ll purchase at least 25 mmt over the next 3 MY’s. China’s Sinograin will auction off another 1.1 mmt of state held soybeans on Jan. 13th in order to free up storage space for US soybeans. This is their 4th auction with the previous 3 totaling 1.5 mmt. It’s believed they intend to auction off 4 mmt by the end of Feb-26. Since 2000 March soybeans have closed higher 58% of the time on report day. The BAGE reports Argentine plantings have reached 88% while holding their production forecast at 48.5 mmt.
WHEAT
Quiet trade as prices ranged from down $.04 in MIAX to steady in KC. Spreads weakened in CGO while steady in KC. Mch-26 CGO holding within its $5.00-$5.25 range. Mch-26 KC consolidating near its 50 and 100 MA, just below the December high of $5.36 ½. Harvest in Argentina is virtually complete at 98.5% while the BAGE held their record production forecast at 27.8 mmt, well above the USDA at 24 mmt. Thailand reportedly purchased 120k mt of feed wheat around $256/mt CF for May-June shipment. Argentina is the likely source. Spot CGO futures have closed higher on January report day 68% of the time since 2000.
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