Morning Highlights


Highlights

  • As of 7 AM CST crude $0.16 lower, US$ 0.520 points lower, and gold 5.4 higher.
  • March options expire February 23rd and First Notice Day for March futures is February 28th.
  • The Lunar New Year in China begins on Friday, February 16th. China’s markets will be closed from Lunar New Year Eve on the 15th through the 21st of February.
  • USDA’s Ag Outlook Forum is scheduled for February 22-23.
  • USDA Prospective plantings report will be out Thursday, March 29th.

Corn

  • Corn following the wheat and bean markets was weaker overnight, after trading strong all day yesterday and closing at their high for the day.
  • France has increased its 2017 maize crop, due to yield increases, to 14.3 million tonnes.
  • March corn sees resistance at $3.67 ½ and 3.69 ½ with support at $3.65 ¼ and $3.64.
  • Dalian market corn was down 7 ½ overnight.
  • Spreads; H/K 7 ½ cent carry, K/N 8 cent carry, N/Z 14 ½ cent carry.

Outlook:  Following wheat and soybeans in choppy trade and watching weather events. Farmers very interested in the CH $3.70 and CZ $4.00 areas, expecting there are plenty of sales to be made at those levels if reached.

Soybeans

  • After the nearby contract closed yesterday above the $10 mark for the first time since December 6th, soybeans were weaker somewhat overnight, but are making gains again here this morning early. At 7 AM March soybeans were up $0.01 at 10.02 ¾.  
  • Scattered rains fall in Argentina this week with limited precipitation to aid dryness, but by the weekend should see rains fall in nearly all Argentine growing regions. Brazil received 0.10-0.50” of rain across most of its growing regions expect for RGDS and Minas Gerais.
  • March soybeans see resistance at $10.04 ¾ and $10.13 ¾ with support at $9.97 ¾ and $9.81 ½.
  • April palm oil closed down 28 ringgits, at 2515 ringgits.
  • Dalian market beans were up ½ cent, soymeal was up 3.00 and soyoil was up 10, overnight.
  • Spreads: H/K 10 ¾ cent carry, K/N 9 ½ cent carry, N/X 8 ¾ cent inverse.

Outlook:  Trade will be heavily concentrated on weather in South America, especially Argentina. Looking for some pullback on profit taking today, but if dry weather persists, watching for some increased buying interest again later in the week.

Wheat

  • Wheat was weaker overnight on profit taking after strong gains yesterday, due to weather concerns in hard red winter wheat country.
  • France after cutting planted area, has reduced its soft wheat crop to 36.6 million tonnes from 37.0 million tonnes previously and cut its 2018 winter wheat area as well from 5.03 million hectares to 4.96 million hectares.
  • Fairly unchanged weather forecasts for the US southern plains, temperatures will average below normal with just a few snows possible in northwest Kansas and eastern parts of Oklahoma and Texas.
  • Iraq says it could see 20% less wheat production than last year, due to dry weather.
  • Syria is in a tender for 300,000 tonnes of wheat and Japan is in a tender for 84,683 tonnes of food wheat.
  • Spreads: Mpls H/K 12 ¾ cent carry, Kansas City H/K 15 ½ cent carry, Chicago H/K 12 cent carry.

Outlook:   Watching for continued weakness after yesterday’s gains, but most of the focus is centered on US southern plains weather, if models remain dry expect Chicago shorts to continue to cover and lead the market higher. If rain begins to show up in the forecast for dry areas, it will be tough to hold gains.