Closing Markets: Corn: -2.25 old & -0.25 new.
Beans: -6 old & -3 new. Wheat: -7.
Good evening!
Market Recap-
Ag markets were mostly lower across the board to start the week this week, as weather-based buying on possible logistics concerns from last week turned into selling on Monday as the winter storm has passed and as there is improved moisture in the forecasts for South America. Otherwise, aside from regular weekly export inspection figures, it was another slow news day and as a result, a down day in terms of volume.
Corn Summary-
Corn futures saw a lower close to start the week on Monday, as it appears the high made Friday is going to be a bit of a hurdle for the market to overcome this week amid improving weather and what continues to be a burdensome supply outlook around the globe. Export inspection data this morning was again good, but like we've talked about on previous Mondays throughout winter, the market simply doesn't care and sees this as old news at this point. The other limiting factor we see for rallies from here is the fact that farmer likely hasn't sold many bushels for a while, and any sort of up move will quickly be met with him/her cutting ties with some more supply to generate another round of cash needs. The Trump money is great, but it will not cover all the production costs associated with new crop planting this spring.
Soybean Summary-
Soybeans started the week out trading lower as well on Monday, with both the beans and the meal markets under a similar amount of pressure from what was likely an improvement in the weather outlook for Argentina over the weekend. Remember, while their corn crop this year is expected to be a big one and has taken a lot of the chatter of late, Argentina is far and away the world's number one exporter of soybean meal, which means weather issues there impact this market as well. Otherwise, with China having now reached its 12 MMT purchase agreement, the big question as far as most traders are concerned is does their buying again shut off from here and return to what it was for most of last year, or has the relationship between Trump and Xi made enough progress for the Chinese to continue taking a few cargoes here and there despite clear economic disadvantages to South America.
Wheat Summary-
Wheat futures saw higher trade in the overnight hours last night to get the week started, but drifted backwards throughout the day session to close lower by the end of the day as the bark regarding this weekend's winter storm appears to have been a bit louder than the bite. The storm's path dumped a good layer of snow cover across a lot of the wheat belt to insulate it against the frigid temps, which some feel likely limited damage. However, any assessment in the next several weeks will be nearly impossible, which means it'll be a game of wait and see until spring when more is hopefully known. Aside from this, there was little new in Russia/Ukraine over the weekend, with most still seemingly rather pessimistic on the idea that any sort of lasting ceasefire is near.
Outside News Headlines-
Crude oil futures down $0.20+/bbl.
Weather Updates-
Following a blast of winter weather across a lot of the Midwest and mid-south over the weekend, both the EU and the GFS models see a more benign outlook for several days now this week, with both seeing little in the way of precip across most all the US between now and Friday. The northeast and areas around the great lakes will see light/scattered precip from a few scattered systems, but will still generally be drier than last week.
Temperatures this week will also not be quite as extreme as last week, but will still be on the colder side of normal across the eastern US through the weekend and into the first part of next week. Highs in the single digits will stay common across far northern areas, but the central part of the Midwest looks to at least be in the teens during the day the rest of the week this week.
Looking longer term then beyond next week, models are trying to allow western US warmth into the eastern half of the country, but our confidence in this solution is not great. Precip-wise, there is good model agreement on a lot of the US continuing to see below normal precip, but the models also show some possible wet conditions to the north along the border with Canada and then over to the Great Lakes, and then also to the south around the border between the US and Mexico.
There is still a lack of forecasted moisture for the ag regions in far eastern Argentina, but the models have trended wetter elsewhere over the past couple days. On temperatures, there is disagreement between the models, with the GFS staying with the same warmer bias seen last week in the 10-day period, while the EU has shifted a little cooler.
The models have also trended wetter across southern Brazil over the weekend, and now show good rains of 1-2" through a lot of the area between now and Sunday, with even some locally heavier amounts possible. For temperatures, there continues to be little if any concern due to extreme heat, as the models see most all the country staying near normal, if not even a little below in some of the central and west-central regions.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
