CORN
Price slipped $.02-$.04 today led lower by old crop contracts. Spreads weakened, likely due to a pickup in farmer selling. Mch/May traded back out to $.08 ½ carry, the lowest in just over 2 months. Longer term support at the 50 day MA, currently $4.40 ½. EIA data showed ethanol production slipped to 1,102 tbd, or 324 mil. gallons, down from 327 mil. the previous week however up 3.8% from YA. Production was in line with expectations and above the pace needed to reach the USDA corn usage est. of 5.50 bil. bu. There was 111 mil. bu. used, or 15.9 mil. bu. per day, well above the 14.92 mbd needed to reach the USDA. In the MY to date there has been 1.920 bil. bu. used, or 15.36 mbd, an annualized pace of 5.607 bil. Ethanol stocks jumped out to an 8 month high at 24.15 mil. barrels, however just below the 24.4 mb from YA. Implied gasoline demand last week jumped 4% to 8.48 mil. barrel per day, which was also up 2% YOY. History has shown a bit of a bullish bias on January report day. Since 2000 spot March futures have closed higher 14 times (58%), while closing lower 11 times. The last time we had a limit move was 2012 when corn broke $.40.

SOYBEANS
Prices are mixed across the complex with beans $.01-$.03 lower, meal was down $2-$3 while oil was up 30-40 points. Spreads weakened across the complex. Late session weakness was likely driven by comments from a BAGE climatologist stating that expected rains between Jan. 16th and 22nd across key agricultural areas in Argentina would bring significant relief from recent hot/dry conditions. The exchange meteorologist said their models suggest 50-75 millimeters (2-3 inches) of coverage. As temperatures heat up across Argentina and S. Brazil, crop stress will be on the rise in the short-term, however trendline yield are still possible with a more normal rainfall pattern late Jan. into Feb. Weakening basis levels in Brazil continue to limit upside potential. The USDA did announce the sale of 120k mt (4.4 mil. bu.) of soybeans to an unknown buyer. The Mch-25 bean oil recovery stalled out as prices approached $.42 lb. Next major resistance not until the 100 day MA at $.4220. Mch-25 meal for now rejected trade below the $300 level and its 50 day MA. I do look for a 2 mmt increase in their Brazilian bean production estimate to 171 mmt. While spot board crush margins were little changed at $1.24 ¾, bean oil PV rebounded to a 4 week high at 40.9%. History has also shown a bullish bias on January report day for soybeans. Since 2000 spot March futures have closed higher 15 times (60%), while closing lower 10 times.

WHEAT
Prices were $.05-$.10 lower across all 3 classes today. With fresh news limited, prices quickly pulled back from the mini rebound stimulated by the lower US winter crop ratings earlier this week. Although the speculative trade remains fairly heavily short in wheat, the market lacks a spark needed to ignite a short covering surge. The next winter storm is expected to bring a mix of snow and ice from NC TX across AR into the Ohio Valley region tonight thru Friday. Little moisture is expected for the WCB and central plains over the next 7 days. A few different S. Korean feed group reported each bought 65k mt of feed wheat at just under $250/mt CF. After making a small purchase earlier this week, Jordan issued another 120k mt tender for optional origin milling wheat with offers due Jan. 14th. History shows wheat has the strongest upward bias on January report day. Since 2000 spot March futures have closed higher 17 times (68%), while closing lower 8 times.

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