Some Profit Taking Noted in Grains

MORNING AG OUTLOOK

 

Grains are mixed to lower. US stocks are higher. NASDAQ has gone 467 sessions above 200 DMA and second longest ever. US Dollar is lower. Crude is higher. Gold is higher on US tariff concerns. Some profit taking was noted in grains. US President Trump will speak at Davos economic conference. US west Midwest spring weather could be warm and dry.

 

barn and silos

 

SOYBEANS

SH is near 10.64. SH overbought. Dalian soybean, soymeal and soyoil were higher. Drier weather could help advance early Brazil harvest. Rains are forecast next week. C and N Argentina will be dry this week. Rains later in week except BA. Weekly US soybean exports were 973 mt vs 1,250-1,600 expected. Season to date exports are 32.3 mmt vs 26.7 ly. USDA goal is 49.6 mmt vs 46.1 ly. Generation winter storm has slowed US gulf logistics. Brazil soybean basis softer on higher futures and delay in China unloading Brazil soybean vessels due to stricter customs restrictions. Trade still trying to evaluate China and US trade relations. China has not bought agreed Phase 2 buying US goods.

 

CORN

CH is near 4.88. Dalian corn was lower. Drier weather may help Brazil corn planting. Rains are forecast for next week. Falling ratings in Argentina and delayed plantings in Brazil is supporting corn. Weekly US corn exports were 1,541 mt vs 1,000-1,350 expected. Season to date exports are near 19.2 mmt vs 14.7 ly. USDA goal is 62.2 mmt vs 58.2 ly. Key could be global/Chinese demand for US corn especially China following the reportedly positive call between Trump and Xi. JFK Jr suggested banning HFCS for human consumption. US uses 1.3-1.4 billion bushels for HFCS. Some techies feel corn futures are neat top. Market is overbought. Last July funds were net short 353,000 corn futures. They are now long 321,000 and near record long. Commercials have increase net short in farmer selling.

 

WHEAT

WH is near 5.58. KWH is near 5.76. MWH is near 6.03. Higher tide lifts all boats. Managed Funds remain large net shorts of wheat. Weekly US wheat exports were 261 mt vs 300-500 expected. Season to date exports are 13.2 mmt vs 10.7 ly. USDA goal is 23.2 mmt vs 19.2 ly. The bulls point to the fund short and multiple N Hemisphere potential weather problems while the bears note that all major origins demand could be lower. Final Russia and EU wheat could be key. Reports of China being forced to resell Australia China wheat cargoes due to extending protection for the domestic industry weighed on World wheat prices.

 

 

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