COMMENTARY 1/20/17

Temps remain hot in Argentina and Paraguay as highs reach the 90s-100’s.  (This is not the case for S Brazil) Mid next week a cool front is expected to slide in N, breaking the heat and maybe causing some widely scattered storms but wide coverage is not expected.

St Louis river level RISING ~ at 10.4′ and forecast 13.3by 1/24.  

CORN

UP 3

Higher for the fifth day in a row.  Mar fut finished right at the 200 day moving average with the high at 370, the highest in six months! The hot/dry weather forecast for Argentina continues to support. Export Sales were ABOVE expectations at 53.8 mill bu, well above the expected 35-47. The USDA reported another sale this morning of 126,312 MT unknown. In the last week, Funds have increased their long by more than 17K contracts.

 Bloomberg Trader Bias:  Bullish 37% TW (17% LW),  Bearish,39% (21% LW), Neutral 44% (42% LW)

BEANS     

DOWN 3

Argentina’s less than ideal weather should moderate and the wettest areas aren’t called to get additional for the time being.  S Argentina could still use some rain and the debate for potential acreage changes and planted vs harvested acreage will continue.  Crop size ranges could  be as low as 48 MMT or as big as 54 MMT.   We saw pretty good movement earlier on board rallies, but basis is still weak from the hike in nearby freight.  Export sales were better than expected  36 mill vs expectations of just 15 – 22.  Of that total 22.5 mill went to China.  Meal Sales, too, were better than expected at 269,800 MT vs expectations of 100-200. The markets will examine the new forecasts on Sun night and add weather prem or take it away.

Bloomberg Trader Bias:  Bullish 42% TW (0% LW), Bearish 37% (61% LW), Neutral 21% (39% LW)

WHEAT

UP 5

Wheat led the rally today.  That’s new!  SRW buying was driven by techs and the weak dollar helped too. Export Sales 8.9 mill vs expectations of 9 – 17 mill bu and just 2.2 mill was disappointing for the new crop as well.  HRW export demand continues to firm.

Bloomberg Trader Bias:  Bullish 39% TW (17% LW), Bearish 33% (44% LW), Neutral 28% (39% LW)