Headlines:
- Grain markets will be closed Sunday evening, January 15 and all day Monday, January 16th in observance of the Martin Luther King Day Holiday. Trade resumes Monday evening at 8 PM ET.
- Chinese soybean imports barely grow in 2016…
Chinese soybean imports rose by only 2.7%, the slowest pace in years, over 2016, official customs data showed. According to US Department of Agriculture figures, Chinese soybean imports grew by some 7% in 2015, and 13% in 2014. China imported 9.0m tonnes of soybeans in December, bringing total soybean imports in 2016 to 83.9m tonnes. This was the highest in a year, up 14.8% from November’s figures, but still a touch down from last December, which traditionally sees heavy imports ahead of the Chinese New Year holiday. But soybean imports could be set to get a boost from rising tariffs on US dried distillers grain imports. Since September of last year, anti-dumping duties have been imposed on imports from the US, the world’s main exporter of the high-protein residue from ethanol production, which is used in animal feed. This week a final ruling formalized and increased tariffs on DDGSs. The move was seen as bullish for soybean futures, as without DDG’s, feed mills will have to up their use of soymeal, produced from domestically-crushed soybeans
- Brazilian coffee output fall in 2017 ‘may keep prices firm’
A retreat in Brazilian production this year “may keep coffee prices firm”, Cepea said, flagging expectations that the decline in output may be as much as 20-30%. The research institute said that while Brazil and Colombian output is expected to show increases for 2016-17, stocks carried over into 2017-18 “are expected to remain tight”, thanks to drops in output in Vietnam and Indonesia. “In addition, world consumption is expected to increase,” said Cepea, which is attached to Sao Paulo University. And looking ahead to the 2017 harvest, “even without official estimates of Brazilian production… initial signs already indicate that it should be lower”.
Summary:
The US Dollar was weaker again today and has been in correction mode since the top it made on January 3rd. We measured all the pullbacks stemming from the low that was made on May 3rd last year using the bar with the high close as the ‘top bar’. From May through today the longest correction has lasted about 19 trading days. This most recent correction has an 11-bar count from our viewpoint. If the US Dollar continues lower for 9 or more trading days, then that would be the 1st indication that a possible change in trend could be in play. The grain markets have been the beneficiary of the weakness in the USD coupled with the bullish news from the USDA yesterday.
In overnight trading, we saw some profit taking in the grain markets but as the regular session trading commenced buys returned to the markets lifting all three markets into positive territory. Soybean was the largest point gain advancing 4 point. Wheat and Corn were only marginally higher adding 1 and 2 ticks on the day respectively
