Written Commentary
MORNING AG OUTLOOK
Grains are higher. US stocks are mixed. US Dollar is higher. Crude is lower ahead of potential tariffs. China owned Smithfield IPO was $20 vs $23-$27 target and ended near $19.75.
SOYBEANS
SH is near 10.51. China is closed for holiday. S Brazil and C and N Argentina saw rains. Drier weather could help advance early Brazil harvest. Rains are forecast next week. Delay in Brazil soybean harvest is firming export prices. C Brazil yields near record. S Brazil yields could be down 20 pct vs ly. W EU is too wet. Black Sea and Ukraine is too dry. SH-SK spread has widened out to -15. US domestic soymeal basis is lower and stocks build at plants. SMH-SMK spread record wide at -8.80. Both SH and SMH futures held support despite mostly negative US demand news.
CORN
CH is near 4.90. China is closed for holiday. S Brazil and C and N Argentina saw rains. Drier weather could help advance early Brazil safrina corn planting. Safrina corn planting are 1 pct planted vs 10 average. Rains are forecast next week. W EU is too wet. Black Sea and Ukraine is too dry.. CH-CK spread has widened out to -11. USDA announced 132 mt US corn sold to S Korea. Threat of US tariffs against Mexico could have retaliations if Mexico issues tariffs against US corn. Window for Brazil farmers to plant the safrina crop is slowly closing. Some Brazil farmers are considering switching from corn to sorghum. Domestic demand for Brazil corn continue to increase.
WHEAT
WH is near 5.48. KWH is near 5.66. MWH is near 6.01. Matif futures traded higher following higher wheat futures. WH-WK is near -14. Specs covered wheat shorts after one meteorologist suggested the US winter wheat crop could be down 15 pct due to winterkill and dry weather. Russia crop could also be below 85 mmt vs 81.5 ly. W EU is too wet. Black Sea and Ukraine is too dry. France rains beginning to drop crop ratings and production prospects. Increase Argentina wheat sales could weigh on World wheat prices.
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