Jan 27 Morning Ag Commentary

by Steve Freed,

Grains are lower. SH is down 11 cents and near 8.90. Support is near 8.80. CH is down 6 cents and near 3.81. Support is near 3.76. WH is down 11 cents and near 5.62.Support is near 5.43. Markets are concerned about spread of coronavirus. 2,800 people infected with 3 pct mortality rate. In China, some 56 million people are being quarantined. There is some that fear soaring US and World debt could slow lasting prosperity.

US Dollar rallied last week with traders moving to safe positions due to the spread of the coronavirus to outside of China. Gold futures have also attracted new buying. Higher Dollar could continue to weigh on commodity prices.

For the week ended January 16th, U.S. All Wheat sales are running 13% ahead of a year ago, shipments up 24% with the USDA forecasting a 4% increase on the year. U.S. Corn sales are running 37% behind a year ago, shipments 49% behind with the USDA forecasting a 14% decline. U.S. Soybean sales are running 3% ahead of a year ago, shipments 36% ahead with the USDA forecasting a 2% increase on the year.

Corn futures were flat last week. News of China buying US corn triggered fund short covering. US corn export prices are the lowest feed grain in the World. Still large US farmer supplies and talk of higher US/World 2020 supplies limits the upside in prices.

Wheat futures ended the week lower on fund profit talking. Talk that China may buy US wheat in the trade deal has helped rally wheat prices. Still talk of normal 2020 wheat crops could limit the upside in futures. US wheat export prices are competitive to slow trade from EU and Russia.

Soybean futures continued lower as Brazil record 2020 harvest nears and on lack of new China buying. Soymeal futures found support due to higher demand for US export. Soyoil prices dropped and followed lower palmoil prices.

The South American weather forecast for Brazil has moderate rainfall for most sections of the central growing regions with lesser amounts both to the north and south over the next 6 to 10 days. The Argentine weather forecast will go from a hot and dry period over this past weekend to a rain event seen starting tomorrow.

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2020-01-27T13:06:41+00:00 January 27th, 2020|