Weekly Market Recap


The U.S. government shutdown is completed its third week, with no end in sight. President Trump says he may declare a national emergency in the next few days to secure border wall funding, as that continues to be one of the biggest contentious issues.  The USDA did not issue the January WASDE due to the shutdown. The market is left with only inspection and EIA energy data. 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. China’s statement after the conclusion of trade talks lacked any details but indicated that the two sides have “established a foundation” on key issues. The U.S. statement earlier in the day said China pledged to purchase “a substantial amount” of U.S. products and services. FOMC minutes revealed that the Fed sees the path ahead as “less clear” regarding interest rates and said they “can afford to be patient.”


The Buenos Aires Grain Exchange reports that Argentina’s corn is 86.1% planted vs 85.8% last year and 86.8% average. Conditions were down slightly, at 8.1% excellent, 43% good, 43% fair, and 5.9% poor.  Rosario estimates Argentina’s corn crop at 44 million tons vs 42-43 million tons last month, 32 million tons last year, and USDA at 42.5 million tons.

EIA weekly ethanol production was down 11k barrels/day to 1.0 million bpd matching the lowest production level of the marketing year. This is below the USDA pace and is expected to remain weak due to poor margins. Corn inspections were very weak, missing the low end of expectations. Inspections are be-hind the USDA export pace by 80 million bushels, as the gap jumped much wider this week.



Egypt’s GASC bought 295,000 tons of Russian wheat for Feb 20-28 shipment, and 120,000 tons of Russian wheat for March 1-10 shipment. Lowest price was price was $263.45/ton C&F. US SRW was the cheapest FOB at $239/ton, which puts it at about a $7-10 premium to Black Sea with freight. The Russian Ag Ministry says their grain exports are up 5.1% from a year ago, at 28.2 million tons. Grain inventories are down 19.4% YoY at 42.4 million tons. US wheat inspections were very poor, coming in well under the low expectation this week. Inspections are be-hind the USDA total by 144 million bushels. Spring wheat made up just over half of the inspections.



Conab estimates the Brazil soybean crop at 118.8 million tons, down from 120.06 million tons last month and 119.28 million tons last year. The average trade estimate was 117 million tons. AgRural dropped their Brazil soybean crop estimate from 121.4 million tons to 116.9 million tons due to extreme heat and dryness in southern Brazil. Canada’s soybean exports to China totaled 1.4 million tons in November, up from 900,000 ton in October and 532,000 tons last year.

Soybean inspections dropped below 1 million tons for the 3rd straight week. Inspections have once again fallen below the USDA pace by 5 million bushels now. Netherlands, Argentina, and China were the 3 biggest destinations for beans this week.


February live cattle continued to trend higher to a new contract high of $125.65. Nearby feeders backed off on the day, hitting a low of $146.07½. The 50 and 200 day moving averages are pegged at $146.92 and $146.98 respectively. The last trading day for January feeders is January 31st. The USDA morning boxed beef highlights showed choice cutouts fell $1.14 to $212.82/cwt, while selects decreased 63c to $207.14/cwt. Beef margins increased $2.25 to $48.75.


The overall trend remains higher. Those in the business of underestimating OPEC will be out of business. OPEC has been effective. When they plan to cut, they cut. When they plan to produce more, they produce more. With their current strategy of cutting, this should keep price support moving forward. US oil rig counts have been falling and with crude having been in the $40’s and in the low $50’s it’s tough for a lot of US oil producers to make a buck. AAA is reporting a national average gasoline price of $2.235, down from $2.420 a month ago and compared to $2.506 at this time last year.