Written Commentary
OPENING COMMENTS
Ag Fundamentals:
Managed money is long over 220K contracts long corn. You could look at that length and start to loose confidence in a continued rally. Corn could be nearing it’s top, but support may come from both this Friday’s report and continued dryness in Argentina. In my opinion, farmers should be seriously considering locking in bids above 460 CH5. Corn ending stocks were estimated at 1.738 billion bu in December. Trade ranges for corn ending stocks are now from 1.54-1.815 billion with an average estimate at 1.675 billion bushels of corn. Managed money is playing beans a bit closer to the chest at around -56K contracts short. Brazilian estimates are now ranging from 169 to 180 million MT. To compare, the US only produces just over 120M MT. If such a high production is already baked into the cake, soybean prices have the opportunity to react higher with any news of problem areas in South America. It is on par to see dryness in Northern Argentina during La Nina weather patterns. Central and north central regions of Brazil are getting plenty of moisture. There may even be pockets of flood risk popping up. Between huge supply and the risk of Trump’s tariffs changing the demand picture, It makes sense why managed money has decided to inch closer to an even position. soybean ending stocks were estimated at 470M bushels in December; the trade range is now from 390M-495M bushels. The average trade estimate for soybean ending stocks is 457M bushels for Friday’s report. Wheat ending stocks were reported at 795M bushels in December, now ranging from 785-825M bushels, and the average ending stock estimate is 799M bu.
Minimum Temperatures tomorrow 1/8/24 are expected to be below normal for the heart of the US and extends into the Southern regions.
Southern Regions Expecting Snow are at risk of both transportation safety and power grid issues. When folks down there get snow fall their infrastructure causes logistical slowdowns and cancellations. I’m sure people are already making a run on the grocery stores today.
Export & World News
The USDA reported a flash sale of 110K MT of corn sold to Colombia this morning. Algeria issued an international tender to buy up to 240K MT of animal-feed corn from Argentina or Brazil. Indonesia is now expecting to double their previous rice import estimates, from 1.27 MMT to 3 MMT.
Malaysian palm oil futures were up 35 ringgit overnight, at 4373.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
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