Early Market Talk

Markets clawing back some of yesterday’s losses. At 0630 CH19 $0.02 ¼ higher at $3.78 ½ but remains down $0.04 ½ for the week. SH19 up $0.02 at $9.10 ¼ and at this point $0.11 ¼ lower for the week. KC and Chi wheat each $0.05 higher.

Dow futures a scratch lower at 23,924 this morning. Crude up $0.26 at $52.84 and about to turn in its best weekly price performance since last September. Trade optimism with China getting the nod? Suspect after a near nonstop $34.00 break its more like normal consolidation. Some tough price resistance right in this area on crude charts.

No USDA reports today and no rescheduled date yet set. When we do ultimately see the Jan production numbers the surprise would be larger yields for corn and soybeans. Trade in near universal agreement of smaller yields and somewhat backed up by historical statistics. Will take a more detailed look at that later this morning.

Trade talks set to continue in DC Jan 30 – 31st between US and top Chinese officials. Meetings this past week were called positive by both sides.

Brazil weather remains problematic for the next two weeks. Additional crop losses likely but from what level. The “How small in the Brazil soybean crop” game really ramping up. Well followed trade sources have the Brazil crop from between 116 -118 mmt today. Going to take a much smaller crop than that to have any long-term implications.

China to date suspected to have purchased up to 5 mmt (183 mln bu) of US soybeans. To build on the above, going to take a lot more than that to have any long-term implications.

Acreage mix for next year continues to be debated. Current soy / corn ratio nowhere near levels that would be considered compelling for a switch to occur. Going to take a much narrower soy / corn spread to once again, have any long-term imp.

Article Written by:

Bruce Nelson