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Morning Market Review for Jan. 20, 2017

Crops lower ahead of inauguration. (Comments are updated by 7:30 a.m. Central Time.)

Jan. 20, 2017

Overnight trade
Corn: Down 1/2 to 3/4
Soybeans: Down 6 3/4
Wheat: Down 1/2 to 2 1/2

China's GDP growth trumped by Trump

Crop futures are lower as the overnight session winds down and the world awaits the inauguration of President-elect Donald Trump. U.S. stock futures point to a little higher start ahead of the inauguration while Asian stocks were mixed as concerns about Trump’s protectionist policies countered support from better-than-expected growth in China’s GDP.

Weekly crop export sales come out at 7:30 central time today, but little else is scheduled from USDA ahead of or after the ceremonies in Washington. 

In the U.S., forecasts have stormy conditions for much of the country into the weekend with rain in the Midwest and Southeast to give dormant winter wheat some needed moisture. The latest 6- to 10-day outlook is wet for the northern Midwest and northern Plain but dry in the central and southern winter wheat areas. Above-normal temperatures are expected then in Midwest and normal in the Plains.

 The dollar is a little higher but within yesterday’s higher range. Crude oil is up 52 cents a barrel and gold is about unchanged.

 

Corn futures are a fraction lower on the last day of the four-day trading week. They remain on track to close higher for the fourth straight week. The March futures remain about a number of key moving averages, but remain shy of the 200-day at about $3.70. 

Argentina is dry this week stays, which should aid the corn harvest. Rain arrives there next week. Brazil is wet this week during that corn harvest.  

Overseas, May futures on the Dalian Exchange in China up a little at $5.76 per bushel. March futures in Paris morning trade were weak at about $4.57 after adjustments for volumes and currencies.

The preliminary report for the CBOT estimated Thursday’s futures volume at 284,289. Open interest increased 12,002 with March’s up 2,181 and May’s up 1,924.                 .

Bottom line: Weekly export sales later this morning should be up from last week’s small number.

 

Soybeans are lower but remain on track to finish higher for the second straight week. A mix of wet and dry areas in Argentina supported soybeans this month as well as the flow of investor money into soybeans and other crops.

Soybean meal is down about $3 a ton and soyoil is a few ticks lower Argentina crop areas are dry this week, but rain should arrive next week in the dry southern region. Brazil will have showers in the center-west where harvest is under way while the south is dry. Next week rain should be more widespread in Brazil.

Soybeans for May at China’s Dalian Exchange are lower at the equivalent of $16.84 while May soybean oil there is at the equivalent of 44.18 cents per lb.

March palm oil in Malaysia eased to 32.08 cents a pound. February rapeseed for delivery in Paris was at $10.01 a bushel and Canada’s Winnipeg market canola for March was up 0.25% at $8.82 a bushel. Note: International prices are converted to bushel or pound equivalents with currency adjustments to U.S. dollars for contracts with significant volume.

Daily soybean volume for Thursday was estimated at 211,673. Estimated open interest rose 10,516 with March’s up 2,915 and May’s down 791.             

Bottom line: Weekly exports today are expected to be up from last week’s small number. South American crops remain in focus as harvest ramps up there. Brazil is harvesting now, but it will be March before combines roll in Argentina. Subscribe to our free E-newsletter, Farm Futures Daily.

 

Wheat markets held overnight losses into this morning with the two winter wheat markets on track for lower weeks.

Rain moves through the southern Plains and Southeast this weekend to help the wheat there.

No U.S. wheat was offered in Egypt’s tender for an undisclosed amount. Results of that tender are expected later today. As expected, wire reports say Taiwan bought 93,605 metric tons of milling wheat and South Korean flour mills bought 100,000 of U.S. wheat and 87,500 of Australian.

March futures in Paris morning trade were a fraction lower at $4.90 after conversions to dollars and bushels.

Daily soft red winter wheat volume for Thursday was estimated at 113,875. Open interest was estimated down 553 with March’s down 3,543 and May’s down 252.

Bottom line: Winter wheat has turned lower after last week’s bullish USDA report. Weekly export sales later this morning are expected to be similar to last week’s. Wheat fundamentals look limited as the market struggles in to break free of narrow trading ranges. For more details on the outlook, see the Weekly Wheat Review.

 

More from Farm Futures:

Weekly Corn Review
Weekly Soybean Review
Weekly Wheat Review

 

 

 

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This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.
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