Mixed Trade Across The Ag Space

MORNING AG OUTLOOK

Mixed trade across the Ag space overnight with soybeans the upside leader.  This afternoon’s CFTC-COT data will update positions as of this past Tues with major USDA updates on Monday.  Widespread rains stretched from the EC plains across the Midwest and Great Lakes region the past 24 hours.  Much needed rain expected for the SE today.  Good rains across the C. Argentina help improve crop prospects.  Conditions remain favorable for much of Brazil.  The Supreme Court is expected to rule on the legality of the Trump Admin. use of tariffs sometime today.  At risk is roughly $150 bil. in tariff revenue so far collected by the Fed. Govt.  Crude oil is up $.40 barrel, the US $$ slightly higher, US equity markets are steady to higher awaiting key US employment data.  Economics expect non-farm payrolls rose 60k in December with the unemployment rate slipping .1% to 4.5%.

Corn: 

Mch-26 is steady holding near $4.46 and just above its 50 day MA.  Traders expect US production will fall 200 mil. bu. to 16.552 bil. with the ave yield slipping to 184 bpa.  Ending stocks to drop 57 mil. to 1.972 bil.  Much of the lower production will likely be offset by lower feed usage.  Dec. 1^st expected to come in a record high of 12.962 bil. well above the 12.075 bil. YA.  The BAGE reports Argentine corn plantings have reached 89% vs. 92% YA.  75% of the crop is rated G/E, down from 82% LW however well above 46% YA.

Soybeans: 

Mch-26 beans are up $.05 holding just below this week’s high of $10.70 ½.  Mch-26 oil holding just below the top end of its $.48-$.50 range.  Mch-26 meal continues to chop around its 100 day MA.  Flash sales to China this week at only 468k mt are well below the rumored total of 1-1.5 mmt.  We’ll see if the USDA adds to that total at 8 AM.  The Reuters poll shows analysts expect US bean production to drop 24 mil. bu. to 4.229 bil. with the Ave yield slipping to 52.7 bpa.  The ave guess for ending stocks at 292 mil. up only 2 mil. from Nov-26 however the range is rather wide from 245 to 350 mil.  Despite China returning as a buyer of US beans probably not enough to prevent the USDA from lowering their current US export forecast of 1.635 bil.  The BAGE reports Argentine plantings have reached 88% while holding their production forecast at 48.5 mmt.

Wheat: 

Steady trade and within a penny or so of unchanged.  Mch-26 CGO near $5.18 while holding within a $5.00-$5.25 range.  Mch-26 KC consolidating near its 50 and 100 MA, just below the December high of $5.36 ½.  US ending stocks expected to slip 5 mil. to 896 mil. bu.  Winter wheat acres are expected to drop 2% to 32.413 mil. acres which if realized would be a 6 year low.  Global stocks are expected to rise 1.1 mmt to 276 mmt.  Harvest in Argentina has reached 98.5% with the BAGE holding their record production forecast at 27.8 mmt, well above the USDA at 24 mmt.

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