Early Market Talk

At 0600 CH19 up $0.02 ¼ at $3.82 ¼ with SH19 up $0.02 ½ at $9.21. KC an Chi wheat $0.04 ½ and $0.05 ¼ higher. Dow futures 72 pts higher at 23,815. Crude $1.14 higher at $50.93.

Trade talks in China scheduled for two days stretched into three. Lengthened talks showing seriousness of both sides wanting to make a deal? If no deal reached by March 2nd tariffs on $200 bln scheduled to go from 10% to 25%.

While USDA reports are delayed until further notice, average trade guesses have been compiled. ATG on corn yield at 178 is down .9 from USDA Nov estimate. Ave guess on soybean yield 51.8 down .3 from November.

USDA will announce a new release date for quarterly stocks and production data once Govt funding is restored. Told the date will be a week to 10 days after that takes place. Shutdown goes on much longer we might question whether we see a WASDE monthly supply / demand report for January at all?

China approved five genetically modified (GM) crops for import on Tuesday which included DowDuPont’s Enlist E3 soybeans which are bred to resist glyphosate, glufosinate and 2,4-D.

Debate continues on acreage mix for the ’19 crop year. More corn and fewer bean acres needed but current market structure not making that clear? Contact in ND yesterday suggesting some soybean acres will be lost there simply due to the nightmare harvest this past year and not wanting to fight mother nature.

Trade continues to scrutinize rains or lack of in Brazil. Seems to be a race on who can give the lowest production # for Brazil all of the sudden. USDA had them at 122 mmt with many traders now contemplating a 118 mmt estimate. Our team in Brazil pegs production at 116 mmt. Still would be record world carryout stocks holding demand constant.

Firm markets overall with trade talk optimism and lingering Brazil production concerns…

Article Written by:

Bruce Nelson