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  • Export sales, regularly scheduled for tomorrow will be delayed until Friday, due to the holiday on Monday
  • US suffering ‘acute lag’ in soybean shipments, officials admit
    The US is suffering an “acute lag” in soybean export demand thanks to strengthened competition from Brazil, Washington officials admitted – but highlighted a boost to soymeal shipments from Argentine farmer crop stockpiling. The US Department of Agriculture, expanding on a decision on Friday to cut by 1.8m tonnes to 58.8m tonnes (2.1 bn bushels) its forecast for US soybean exports in 2017-18, underlined the country’s loss of share in shipments to China, the top importer of the oilseed. “Most of” the  lag in US exports of 77m bushels in the September-to-November period, and a further decline in December, “can be accredited to sluggish trade with China”, the ministry said, while noting that Brazilian supplies were picking up market share. “Export competition from Brazil has persisted,” with the South American country’s soybean shipments to China swelling “four-fold”, by 4.5m tonnes (167m bushels) in the October-to-December period. Typically, US supplies hold sway in export markets during this period, with Brazilian supplies diminished in the run up to harvest, early in the calendar year. However, this time, Brazilian stocks have been sustained thanks to a record 114.2m-tonne harvest last season.
  • Will cattle futures see a bull market in 2018?
    Cattle futures fared better in 2017 than feared by many investors, who had worried that a rebuild in the US herd would, in easing supply tightness, depress prices. However, with stronger-than-expected exports as well as US demand mopping up extra beef supplies, Chicago futures in live (ie finished) cattle recovered from late-summer stumble to end the year up 2.1%. (This albeit after a tumble of 28% over the previous two years, as herd rebuilding kicked in.) And, with feedlots clamoring for animals to fatten and meet this demand, feeder cattle futures fared even better, adding 11.9% over 2017, after a 41% plunge during 2015 and 2016. Will strong demand continue to win out in 2018? Or will extra supply, following feedlot’s splurge on feeder cattle, dampen prices ahead?

Summary:

Despite Wheat’s recent grind lower to retest prior lows, winterkill and dryness is still potentially an issue for the Wheat complex. Corn stocks in the US and China are still their tightest in several years, so it is expected that Corn exports would eventually pick up. The US Dollar found some support today but if it continues in its downside trajectory the recovery in exports could happen sooner rather than later. Private exporters reported export sales of 130,000 metric tons of Soybeans for delivery to unknown destinations to the USDA for the 2018-19 marketing year. Trade chatters about Argentina not having perfect weather may have help lift prices today. Some believe that think only 10-15% of Argentina Corn and Soybean areas are lacking enough moisture to cause stress in the short-term. Wheat today was supported by traders buying the breaks, after wheat futures hit 1-month lows yesterday. Corn, Wheat and Beans managed to finish the day on higher ground offsetting recent losses.