Written Commentary
OPENING COMMENTS
Ag Fundamentals:
Canada and Mexico tariffs are expected to move forward next week, South American weather is cooperating with respective agriculture operations, and China’s economy is causing their appetite to dwindle. More volatility and fear in the equity markets could drive spectators back into grains. The market is starting to price in the extra 3-5 million acres of corn the US farmer will likely plant this year vs. last. Estimates range from 93 million to 96 million acres of corn. Ethanol numbers will be out tomorrow, remembering that Canada is our largest trade partner for our ethanol export program. It will be interesting to see how Mexico reacts over the next week, they have been our largest partner regarding corn exports. More corn acres next year implies less bean acres giving some support to new crop values, but without disruption in the South American crop demand needs to improve to break higher. Brazil should be close to half way done with harvest after this week which will put them on pace. The USDA downgraded their good/excellent values on winter what in Oklahoma from 48% in late November to now 34% following the recent winter weather. We have a break in below freezing temps for the next week. Russian export values have increased by $20-30 per ton in the last few months.
EXPORT & WORLD NEWS
South Korea bought 60K MT of soymeal from south America. Algeria is looking to purchase 240K MT of animal feed corn, 35K MT barley and some milling wheat in an international tender. Iran is also in the market to purchase 120K MT of animal feed corn, 120K MT of feed barley, and 120K MT of soymeal.
Malaysian palm oil futures were up 6ringgit overnight, now at 4565.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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