Closing Markets: Corn: -0.50 old & -1.50 new.
Beans: -5.75 old & -7.75 new. Wheat: -2.
Good evening!
Market Recap-
Turn-around-Tuesday was in full effect at the CBOT today, with prices across the ag space closing lower across the board just a day after seeing sharp gains to start the week on Monday. The January WASDE update from the USDA is now just three full trading sessions away, and the question of what final production numbers are on US crops will likely continue to be top of mind in the short term; otherwise, focus quickly returns to crops south of the equator, which like they're going to be large.
Corn Summary-
Corn futures closed quietly lower on Tuesday on what was a quiet, non-eventful trading session. In the short term, items of importance include the USDA's WASDE update next week, followed by Safrinha corn planting in Brazil and crop insurance pricing in February, and then the US acreage debate as we get into March. Today, we don't see how the demand picture gets a whole lot better than it is currently, which means should the USDA fail to trim production next week, it could become a more bearish development in the months ahead should the lofty demand forecast begin to be questioned or trimmed. Talk that there may be more corn on corn acres this year than in those past has also cast a bearish cloud over prices, while the bull camp needs something new to chew on.
Soybean Summary-
The USDA expectedly announced the soybean sales to China that were rumored on Monday, but traders had a bit of a buy the rumor, sell the fact reaction to the news, and sold values off on Tuesday. Like corn, headlines were otherwise mute, as there just wasn't a lot new on any of the other fundamental fronts. Traders talk about biofuel policy and China exports on a near-daily basis with optimism that one of the two will lead to a rally, but they seemingly ignore the record crop sitting in Brazil that's about to be harvested and the some $1.50+ discount on the world market through February that's coming along with it. China will fulfill its political purchase agreement and then will take its business elsewhere on the premise of economics from there.
Wheat Summary-
Like corn, there was an absence of headlines throughout the wheat market on Tuesday, which led to values drifting to quietly lower closes this afternoon. From a big picture standpoint aside from burdensome global production levels, traders are talking about a likely increase in acres next week from the USDA that is only going to add to the problem if realized. Trying to offset some of this is dryness across the US southern plains, but for now, the expected increase in planted area is offsetting any sort of concern from this today.
Outside News Headlines-
Crude oil futures down $1.30+/bbl.
Weather Updates-
The Midwest will see a pair of low-pressure systems roll through the area the back half of the week this week, with the first seen moving through the area Thursday into Friday, and the second then seen taking a slightly more northern path Friday into Saturday. Exactly where rain falls vs snow is going to be debated in the models the rest of the week, but they are in generally good agreement in the size and timing of the systems.
Following this moisture though, the models see mostly drier biases then over the next couple weeks into the middle of the month, with the exception being the northern part of the US and into the Great Lakes, which sees continued chances at moisture. 10-15 day temperature outlooks trended warmer in the central US this afternoon, especially in the GFS run, but look to continue to be mostly warmer than average in the meantime.
Model runs for Argentina have continued to trend wetter over the last 48 hours for the central part of the country, but it will be important to see how far to the south and east these rains are able to make it. A lack of heat will help to limit stress either way, but traders will still be watching for local totals. Rains are also improved towards the back half of next week, but our confidence in the extended forecast continues to be low.
Nothing new this afternoon for Brazil, as forecasts here continue to see an ongoing mix of rain and sunshine that will be nearly ideal for late season crop development. There's not a growing area in the country that doesn't have some kind of precip potential in the next two weeks, and heat continues to not look to be an issue at any point in the next 10 days.
Enjoy it!
Bailey Runyen
Grain Originator | Topflight Grain Coop.
101 N. Main St. | Cisco, IL 61830
Phone :: 217-669-2141
Email :: brunyen@tfgrain.com
