Some meteorologists suggest that El Nino has peaked recently, however it is not over yet. It may continue to extend into February or March but the weather pattern for Brazil may improve during that timeframe.
Due to weather issues, Brazil’s safrinha corn crop may be somewhat delayed. This may keep the US export window open a bit longer, into the late spring and early summer.
Export inspections yesterday showed that corn inspections are running 27% above last year. This is running above the USDA’s estimated pace.
Corn is under pressure this morning but so far, the March contract is holding $4.70 support. However, a break below that level could trigger technical selling and may lead to a lower trading range.
Farmers in Mato Grosso (Brazil) were granted an additional 20 days to plant soybeans by the ag minister. While not the 40 days originally requested, this extension will allow them to plant up to January 13.
The Argentinian government proposed a plan to increase taxes on soybean meal and oil by 2%, raising it to 33%. This would put the products on par with the tax rate for soybeans.
The European weather model suggests good rains through some of the drier areas of Brazil over the next ten days or so. This includes the states of Mato Grosso, Goias, Tocantins, and Bahia.
February palm oil futures are up for the fifth day in a row due to lower inventory as well as reduced production. Nevertheless, soybean oil futures are looking a bit soft this morning.
Private exporters reported sales of 132,000 mt of US soybeans for delivery to unknown destinations during the 23/24 marketing year.
Egypt is again tendering for wheat. Currently the cheapest offer is from Russia at $260 per ton FOB.
Following the recent Chinese purchases of US wheat and the resulting rebound in US SRW futures, US wheat has become uncompetitive on the global export market. There are rumors that China may be looking to purchase more US wheat, but so far there has been no confirmation.
Despite the closure of the Black Sea Grain Initiative this summer, Ukraine has managed to ship 10 mmt of ag goods. However, that is down 19% from last year. According to Russia, there is no interest on their end to resume the deal.
Paris milling wheat futures are trading lower for the fourth time in the past five sessions. This is not offering any support to the US market. In any case, US wheat futures have turned positive at midday, despite a lower start to the session.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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