2/13/19

Morning Commentary - 02/13/2019

CBOT Mixed Awaiting News on US/China Trade Talk Progress

** 6:30 AM CBOT Futures: Mar soybeans are down .50 of a cent at $9.07, Mar corn is down .5 of a cent at $3.78 & Mar Chi wheat is up 1.50 cents at $5.215

** AgResource Morning CBOT Comment/Analysis: Good Morning! It has been a low volume and mixed CBOT trade overnight. Corn, soybeans and wheat futures have traded either side of unchanged as the marketplace awaits news on US/China trade talk progress.

  Asian equity markets pushed to strong gains on US/China trade hopes with the Shanghai Index up nearly 2% while Nikkei gained 1.3%. US Dow futures call for a 50-point higher opening while the value of the US dollar is slightly higher.

  The delayed CoT report as of Jan 15th showed that managed money was short 16,000 contracts of Chi wheat (down 500), short 27,500 contracts of corn (down 50,000), short 21,000 contracts of soybeans (up 19,000 contracts), short 48,000 contracts of soyoil (down 2,000) and long 11,000 soymeal (down 15,000). 

  There were rumors in the CBOT marketplace that China was checking prices of US fob corn and ethanol values, which is leading some to speculate that the next US ag goods that China could secure is corn – not soybeans. China has already booked 10 MMTs of US soybeans as US/China trade negotiations stepped forward. Traders are wondering if corn could be the next US ag good if new progress is scored in Beijing this week?    

  US President Trump is deciding whether to accept the Congressional offer on a new US budget that includes 55 miles of funding for a wall. No decision has been rendered, but should the Congress approve it and send it to the President for his signature, its important to note that a Bill of US Tax Extenders – including the US biodiesel subsidy was not included in this Budget pact. This is leaving US biodiesel producers concerned as the bill would have to be attached to other legislation which would have a diminished chance of passing.

  The South American weather forecast offers near to above normal rains for across Brazil while sunny/mild weather persists across Argentina. Concern is starting to emerge for dryness across the southern half of Argentina. Near to slightly above normal temps are forecast for Brazil and Argentina.
Arctic cold will be sliding south and east into the Central US in the 6-12 day period that poses a winterkill risk to KS/NE winter wheat with minimum temps to slide to the single digits. The cold will be some 20-25 degrees below normal and cause elevated worry for poorly established Plains HRW wheat.

  Jordan and Bangladesh have offered new tenders for world wheat while US corn demand remains stout from Mexico and South Korea. Russian wheat prices have slipped to $245-246/MT amid lackluster export demand.

  Its another day of waiting on US/China trade talks and news of progress.

** Winterkill Risks for HRW wheat Next Week With Arctic Cold:

** Snows Miss W Plains Wheat Areas: 

** Southeast US to Endure Flooding Rains: 

 

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