Corn: 1 to 2 Higher
Beans: 2 to 3 Higher
Ag markets were on the defensive all day yesterday with traders uncertain about the outcome of the U.S./China trade talks and from the improvement in the weather forecast for both Brazil and Argentina. The EIA’s weekly ethanol production and stocks report will be out this morning and the trade will be watching to see of production can be maintained in the 300 to 310 million gallon/week range. Ethanol production margins are not good and there is some concern that this will result in reduced production and reduced corn usage.
The soybean market remains on the defensive with the improvement in the South American weather forecast and the uncertainty of the U.S./Chinese trade talks. The bean market is facing stiff competition from Brazil as their harvest picks up and there is some concern that Chinese meal demand will be curtailed by the drop in the hog herd due to the African swine fever. Brazilian crop estimates continue to be reduced, although it still appears that Brazil will produce a bean crop of between 114-116 mmt, so there is not going to be a shortage of soybean in the world any time soon.
The USDA has announced that the Jan 11th WASDE and Stocks Reports will be issued next Friday, Feb 8th, which is the next regularly scheduled date for a report from the USDA on crop production. This is a welcome bit of news as many in the industry use these January reports as a strong indicator of market direction until the March 29th prospective planting info is released.
The March dollar index is trading either side of steady this morning at around 95.51. This morning the March crude oil contract is trading around the $53.00 level, which is 50 cents higher than yesterday.
Have a good day and stay safe!