Written Commentary
OPENING COMMENTS
Geopolitics:
Rumors are Justin Trudeau the Prime Minister of Canada, is planning on resigning this week. Justin has served as prime minister since November 2015, having won three general elections. He will be most likely replaced on the ticket by Chrystia Freeland who will oppose conservative candidate Pierre Poilievre. Pierre has a 92% chance of becoming the next Prime Minister according to Polymarket. Donald Trump has criticized Trudeau the majority of time he has been in politics and many thought their relationship would cause headwind in trade. The Canadian dollar has jumped above 70¢ on the news of his possibly resignation.
Macroeconomics:
The dollar has sharply pulled back this morning dropping below 108 on the index. The Dollar had rallied to fresh 25 month highs above 109 on Thursday last week, putting pressure on commodities. The dollar is still trending higher, but could see some volatility leading up to January 20th. It will face opposition from countries around the world attempting to boost their economies, China in particular.
Ag Fundamentals:
Row crops are green across the board this morning with soybeans leading the way. Argentina’s next 10 days are expected to be dry and crop scouting reports from the northern Argentina, Southern Brazil region are starting to pop up with worse than expected conditions. Expectations are that the USDA raises their Brazilian production estimate above 170 MMT and keep their Argentina estimates unchanged. Corn found support at the 200 day moving average. Many expect there to be a slight drop in US corn production on Friday’s report, with the possibility of also raising usage and export demand. Wheat limps off recent contract lows following other row crops higher and supported by a weaker dollar. Indonesian government now plans to regulate wheat imports for animal feed in order to support their local corn farmers. This afternoon we will get a look at an updated Commitment of Trader report and we have the USDA WASDE report out at 11:00 am CST Friday.
Export & World News
Taiwan is looking to purchase up to 114K MT of grade 1 milling wheat from the Unites States in an international tender.
Malaysian palm oil futures were down 26 ringgit overnight, at 4342.
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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