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Grains Lower. No New Bullish News?

MORNING OUTLOOK

Grains are lower. SH is down 12 cents and near 15.33. SMH is near 433.3. BOH is near 65.33. CH is down 5 cents and near 6.17. WH is down 9 cents and near 7.54. KWH is down 9 cents and near 7.60. MWH is down 5 cents and near 9.02.

US stocks are lower. US Dollar is higher. Crude gold, silver, copper, coffee, cocoa, sugar and cotton are lower. Risk off? No new bullish news? Commodities overbought?

Soybeans fell on profit taking and from an overbought technical picture. Since the low on Jan 14, SH has rallied 171 cents, SMH 60 dollars and BOH 12 cents. Most of the rally due to lower estimates of SA crops and China buying US soybeans. There is talk that Brazil crop could be below 130 mmt and Paraguay warmer their crop could be only 4 mmt vs 10 normal. Trade is also worried that USDA will not  be as bullish with SA and US numbers on Feb 9. Talk suggest that China bought 6 US gulf soybean cargoes yesterday. US PNW soybean prices are discount to China vs Brazil. Brazil domestic soybean prices are a premium to farmers vs export.

Corn futures are lower following bearish US weekly ethanol stocks numbers and drop in margins.  Fact US China Ag attaché lowered China imports to 20 mmt vs USDA 26 also weighed on prices. Since the low on Jan 14, CH has rallied 57 cents, There continues to be talk of lower 2022 South America crops. Some estimate losses to be near 20 mmt. 20 mmt loss could add 400 mil bu to US demand. Brazil 1st crop harvest is 11 pct. 2nd crop planting 15 pct.

Wheat futures are lower.  Reduced tension between Russia and Ukraine and fact traders are short wheat vs long corn and soybeans weighs on wheat futures. Since the low on Jan 14, KWH rallied 106 cents only to then drop 91 cents US export prices at a premium to EU and Black Sea also offers resistance. Talk of La Nina through summer could limit US 2022 HRW rainfall.

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