Morning Highlights


Highlights                                 

  • U.S./China trade talks continue this morning, with both sides touting them as a success. A statement is expected to be released Thursday morning, local Asia time.
  • The World Bank lowered its global growth estimate from 3% to 2.9%, with China down from 6.5% to 6.2% in 2019. The World Bank President recently announced he is stepping down, 3 years before the end of his term.
  • The USDA is extending the deadline to apply for farm aid payments. The original January 15 deadline will be extended by the number of business days that USDA offices are closed due to the government shutdown.
  • The January 11 WASDE report will be delayed due to the government shutdown, even if funding is restored.
  • As of 7:00 am CT, crude oil is up 1.00 cents to $50.78/barrel, gold is down 3.40 at $1,282.50, DOW up 100 to 23,843, dollar index down 94, and Euro is up 60 pts.

Corn

  • Deral reports that Parana, Brazil first crop corn condition is down to 74% good, 24% fair, and 2% poor vs 85%, 14%, and 1% in mid December.
  • EIA weekly ethanol production will be released this morning, and is expected to be slightly lower than last week’s 1.011 million barrels/day, as margins are still weak.
  • Conab will release updated Brazil crop estimates on Thursday, with first crop corn expected to come in lower due to dryness. The safrinha crop will not likely see adjustment until February.

Outlook:  March futures up ½ to up 2 ½ overnight.. Traders seem to be waiting for more data, while producers want slightly higher prices.

 

Oilseeds

  • Brazil received better than expected rains overnight, with parts of Parana, Rio Grande do Sul, and Paraguay seeing +1” totals.
  • Deral reports Parana, Brazil soybean harvest is 5% complete, a record pace, with conditions 58% good, 30% average, and 12% bad vs 87%, 13%, and 0% last year.
  • Agroconsult estimates Brazil soybean production at 109 MMT.
  • China’s Dalian soybeans were up ¾ overnight, soymeal down 1.80, soyoil up 25, and corn up ¼. Malaysian palm oil settled up 4 ringgits. 

Outlook

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March beans down 1 to up 4 ½ overnight. Positive reports from trade talks are giving markets a boost this morning.

                

Wheat

  • Egypt’s GASC has two wheat tenders today, one for Feb 20-28 shipment, and one for March 1-10 shipment. They received 9 offers, with Russian believed to be the lowest at around $235/MT. GASC last tendered on December 20, and has bought just 300,000 MT of wheat in the past month.
  • FranceAgriMer lowered its estimate of 2018/19 French wheat exports from 8.8 MMT to 8.7 MMT, with ending stocks up 100,000 MT to 2.8 MMT.
  • Algeria bought 550,000 MT of wheat at $261/MT C&F, likely sourced out of Argentina and France.

Outlook:  March KC wheat up 1 ¼ to up 6 overnight. Export business is picking up, and futures are trading through moving averages.