Headlines:                                                                  

  • Bunge has now purchased two corn flour mills (one in Iowa and one in Texas). This comes after ADM proposed a takeover deal of Bunge
  • Rabobank cuts hopes for coffee, corn and, especially, sugar prices
    Rabobank slashed hopes for sugar prices, downgrading expectations for coffee and corn futures too, and sticking with a somewhat downbeat forecast for wheat values, despite acknowledging the risks posed by La Nina. The bank highlighted that the La Nina weather pattern, which is associated with cold Pacific water temperatures, was “making Argentina and the US southern Plains drier than normal. “Concerns are rising over US winter wheat conditions due to the dry conditions, while concerns continue for Argentine corn and soybean crops.” Indeed, the bank cut to 39m metric tons its forecast for the South American country’s corn harvest, taking the figure 3m metric tons below the US Department of Agriculture forecast, while cutting the soybean production estimate too, to 51.5m metric tons. For corn, “dry conditions during pollination have impacted early planted crop”, Rabobank said, also flagging “deterioration in the Argentine soybean crop due to hot and dry conditions”.
  • Rally sputters as January ends
    Grain futures are mostly lower this morning, after attempts to continue this week’s rally fell flat when trading got underway in Europe. End-of-the-money position squaring could be in play today after bullish reactions to USDA’s Jan. 12 reports kept markets in an uptrend. A steep decline in winter wheat ratings from Ohio to Colorado in January triggered heavy short covering in wheat Tuesday and hot, dry weather looks like it will persist in Argentina’s key growing region. U.S. stock index futures point to a rebound on Wall Street today after mixed trade overnight in Europe and Asia on the heels of this week’s losses.

 

Summary:

Corn gave up some of gains in early trading in the face of profit taking and weakness from Beans and Wheat. Both Beans and Wheat fell victim to profit taking as well. Corn managed to recover some by the end of the day but Wheat and Beans finished the day in negative territory. Corn finished the day flat when the dust settled. Nearby Beans saw big time selling at the preverbal 1000 level. There were probably large standing order at that level. The losses in Beans ranged from 3.50 to 4.25 cents. Wheat surrendered 5.25 to 5.75 cents. Some of the recovery in Corn was perhaps because of optimism about the upcoming export sales reports. That last two reports were well received so the trade is hoping for three in a row. USDA announced the sale of 145,000 metric tons of Corn to an unknown destination for the 2017-18 marketing year.  This comes after the sales to Spain and Egypt earlier this week. Wheat has been due for a bit of a correction but it still has support that stems from continued dryness in the US Southern Plains area.