by Steve Freed,

New month. Grains are lower. SH is down 6 cents and near 9.89. A positive change to South America weather may be weighing on overnight soybean prices. CH is down 1 cent and near 3.60. WH is down 5 cents and near 4.46. K.C. hard red winter wheat futures volume soared to a record of 148,457 traded contracts on Tuesday. US Dollar is lower. Crude is higher. US stocks are higher. Key US spring weather indicator tomorrow; Ground Hog Day. Chicagoans do not want him to see his shadow.

The South American weather forecast has limited rainfall for most of Argentina over the next 5 days with now, some hit and miss rainfall for later next week. Limited rainfall is seen in southern Brazil over the next 5 days with close to average rainfall in the north. Close to average rainfall is seen for all of Brazil over the next 10 days.

Weekly US soybean export sales are est near 600-1,000 mt, corn 1,000-1,500 mt and wheat 300-500 mt.

U.S. ethanol production for the week ending January 26th averaged 1.04 mil barrels per day, which was down 2.07% on the week, down 1.98% versus a year ago; stocks totaled 23.0 mil barrels (down 3.2% on the week, up 5.4% versus a year ago); Corn use totaled 108.1 mil bu versus 110.5 mil last week and versus the 103.8 mil needed to meet USDA projections.

American consumers are snapping up plentiful low-cost pork, but U.S. farmers are worried that trade spats with key export markets in China, Mexico and Canada could hurt a lucrative part of their pork business; the domestic demand outlook remains bright thanks to the strong U.S. economy, upcoming spring grilling season and Easter holiday ham purchases; U.S. goods in general are attractive to foreign buyers thanks to the recent drop in the dollar.

Funds sold 8,000 soybeans, 3,000 soymeal, 1,000 soyoil and 6,000 wheat and bought 3,000 corn on Wednesday. Funds are estimated to be short 75,000 soybeans, long 33,000 soymeal, net short 15,000 soyoil, short 175,000 corn and short 121,000 wheat.

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