COMMENTARY 1/31/17

S Argentina is expecting scattered storms with 0.5″ to 1.50″ of accum followed by a second round of stronger storms with an expected 1.0″- 3.0″ of accum and some areas even higher.  Areas that were wetter this month are also the areas set to receive the most accum this time too.  Scattered storms expected for  much of Brazil and Paraguay as we get into the weekend.

St Louis river level DROPPING ~ at 14.6′ and forecast 13.3by 2/3.  

CORN

UP 2

Turn around Tues!  Funds were actually buyers of 3k contracts which helped. The Argentine forecast has added rains, which is good, because they are getting to the point from recent deluges to where they need some accum for the dry top soil.   These rain chances are significant, making flash floods a possibility again for key growing areas. The US $ was weaker today and that makes US exports less expensive for other countries to buy.  Currency values in SA have been a bit stronger and tends to slow producer selling. Crop insurance pricing periods start tomorrow and continue through Feb.

 

BEANS     

UP 2

Choppy after yesterday’s decline as the  market balances potential record Brazil crop with forecasts for above normal rain across Argentina.  The wettest areas are that of N Cordoba, Entre Rios, and Santa Fe (areas previously flooded mid Dec to mid Jan).  In the month of Jan, the values of the US $ has dropped almost a 1% while the Real has increased 4.5%.  This inversion lowers the price to Brazil’s farmers and is encouraging them not to sell.  Meal basis continues to be extremely weak and their are more storeis of meal being squirrelled away in flats, barges, and rail cars to keep excess supplies out of the market. Brazil bean harvest is 16% complete.  The spring price for crop insurance starts tomorrow to establish a base price.

WHEAT

UP 7

Choppy with a late round of buying.  HRW ratings showed some improvement, but early to draw much between today’s ratings and final yields. The World production situation continues to be interesting with cold temps potential in Ukraine and Russia to  trim yields. Last year, decent snow cover limited winter kill, but this year, the lighter accums could allow some losses. Some privates are est up to a 10% decline for Russia production primarily due to the cold.