Headlines:
- Soybean futures rally on slow Brazilian sales
Soybean prices surged, as the US remains competitive despite the big Brazilian harvest hitting the bins. “International demand for US soybeans is still high,” said Commerzbank, adding that the buying “will be additionally boosted now that the New Year’s festival has come to an end in China”. Commerzbank also noted that despite the rapid progress of the harvest in Brazil, “the soybeans are only gradually reaching the market”. “Having said that, the quantities are considerable, with the crop as a whole being generally estimated at 104m tonnes, and in some cases as high as 106m tonnes,” Commerzbank said. “This is likely to put a dampener on prices,” the bank said. “Soybean prices are finding support in the export activity with a renewed appetite from China and the market pressure from the South American harvest is not yet perceptible,” agreed the French analyst Agritel.
- ADM upbeat on Trump, sees ‘no imminent trade war’ with Mexico
Archer Daniels Midland batted away concerns over the threat Donald Trump, the new US president, to agriculture, downplaying the chances of a trade war with Mexico, while terming “very positive” proposed tax reforms. Juan Luciano, ADM’s Argentine-born chief executive, termed as “premature” the “speculation” on what President Trump’s administration may bring, after early controversy over immigration curbs and verbal salvos aimed at some major trade partners, including Mexico, a huge importer of US agricultural commodities. It was a “big leap” to believe that Mr Trump’s pledge to renegotiate NAFTA, the Canada-Mexico-US trade deal implemented in 1994 would lead to “closing the borders”, Mr Luciano said.
Summary:
Soybeans continued it rally today ahead of tomorrow’s USDA WASDE report. Both Corn and Wheat finished well of their intraday lows with the nearby contracts each closing about 1 cent positive when the dust settled. March Beans were very firm adding 15.75 cents. It was Corn that we anticipated would lead the way higher but now Beans seems to want to challenge Corn as the leader in strength. Corn had already reached the mid-January high a couple days ago, and now Beans is close to reaching its most recent highs. Strength in palm oil and seems to have aided Beans in its advance to the results from the report tomorrow should make for some price movement. Wheat continues to hold one and has done well so far in remaining above key support. The July contract has been locked in between 440 and 460 for some time. Once it is able to break either side of the that trading range with strength look for continued follow through in that direction.
