Unconfirmed rumors that China bought corn from the US Pacific Northwest may have contributed to the strength yesterday. But grains are mixed to lower this morning; the lack of follow through does not bode well for higher prices.
Northern Argentina looks to be in good shape in terms of precipitation, though southern areas of the country look a bit drier.
A decline of about 73,000 contracts of open interest over the past couple of sessions indicates that large spec traders are likely covering shorts. It may also be tied to March option expiration last Friday and first notice date for March grain futures tomorrow.
Soybean harvest in Brazil is expected to reach about 50% complete this week. Dry weather is helping progress, but rains are expected to return this weekend.
Based on analogous years when the El Nino weather pattern shifted to La Nina quickly, there may be more heat this coming summer in the Midwest, and in particular, areas of the western Corn Belt.
There remains a wide variation in guesses between the lower private estimates of Brazil’s soybean crop and the last USDA numbers.
Fourth quarter GDP data this morning showed that the US economy grew at 3.2%, down slightly from the estimate of 3.3%. Inflation may also be easing, with the CPI up 1.8% in the fourth quarter versus 2.6% in the third. This may signal a strengthening in the US Dollar Index in the near term, which may be in part what is pressuring wheat.
Single-digit temperatures this morning in the US Southern Plains reached as far south as Kansas. While there is some worry of frost damage, there is not much concern about significant crop stress or loss at this time.
Jordan is tendering for wheat, but it is anticipated to be sourced from the Black Sea region, which is at a steep discount to both US and French wheat.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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