COMMENTARY 1/18/16

Brazil is expecting favorable weather the next two weeks. Some areas in Argentina are still struggling with drought-like conditions, especially for across the Buenos Aires, S Santa Fe, and S Entre Rios.  The drier areas of E Argentina likely remain dry, although they should cool down into next week.  Showers are expected for Brazil and Paraguay this weekend, then drying should help encourage harvest and planting in N Brazil.

St Louis river level ~STEADY ~ at +15.4′ and forecast to be 13.5′ by  2/2.

 CORN

DOWN 4

Couldn’t take the pressure that beans were exerting.   This market appears to be discounting the possible Russian feed grain export duties and Japan is seeking corn alternatives like…. feed wheat and barley. They can get it cheaper elsewhere, than here in the US.  A greater than expected South African crop estimate materialized at 7.4 MMT vs the Trade est of 5.5 – 6.1.  Import needs could fall from previously est 5 MMT down to 3  vs the USDA at 1.5.  Export Sales will be out tomorrow due to the East Coast snow storm.  Yc is expected to be 31 – 39 mill bu with 25.7 needed per week.  Funds ARE still record short!

Bloomberg Trader Bias:  Bullish, 21%,   Bearish 41%,  and Neutral 38%

BEANS     

DOWN 15

China canceled nearly 400K US beans!  Did they replace them with beans from S Am??  Boy, doesn’t $9.25 or $9.22 look good now for beans delivered nearby to the river?  There is still some stress in S Am but not widespread or overly threatening.  Meal dropped off sharply as the Argentine line up builds.  Export Sales, out tomorrow, are expected to  be 18 – 29 mill bu with only 6.7 mill per week needed.

Bloomberg Trader Bias:  Bullish 7%,  Bearish 59%, and Neutral, 34%

 

WHEAT          

DOWN 4

Russia might or might not raise the duty/restrict exports.

Bloomberg Trader Bias:  Bullish  17%,  Bearish  52%, and Neutral 31%