Mixed Start Likely in Grains with Mixed Outside Influences
A mixed start is likely this am, up 1-2 in wheat, down 2-4 in corn and up 5-10 in beans. Crude oil and the equity markets are a bit higher this am while the $ index is a bit lower, a friendly combination for the grains.
Saudi Arabia will be in the market Jan 5 for 500,000 tonnes of optional origin milling quality wheat. Various countries are in for optional origin wheat tomorrow and Pakistan is in at the end of the week for 500,000 tonnes of optional origin wheat.
The Nov Consumer Price Index report this am showed a drop of 1.7%, the largest monthly drop ever. This could be negative for all commodities, including grains, since it is deflationary and, by definition, deflation is a negative influence, just as inflation is a bullish one.
The Federal Reserve Board is expected to cut interest rates today with an announcement at 1:15pm, US Central time. This will impact the $ and could indirectly influence grains tomorrow. OPEC is expected to cut crude oil production in a meeting tomorrow, which could also influence the grains. The only question regarding the Fed and OPEC moves is "How much?" Keep watching the outside markets for guidance in the grains, even though the grains did show some limited independence yesterday.
Argentina will be mostly hot and dry the next several days although there is a little isolated rain in the forecast the next few days. The next chance of good rains comes this weekend, along with cooler temps. Corn and beans are being stressed in Argentina currently, increasing the need for rain soon. Brazil saw up to .6" light rain in Parana overnight, but it was dry elsewhere. Rain is forecast in the north the next two days, where conditions are favorable overall. More rain is forecast in the north this weekend but dry weather is forecast to return to the south, increasing the need for rain there again soon.
There is a cold weather threat in the southwest winter wheat belt the next day or two as snow cover is largely lacking to protect the crop. Light precipitation is forecast this week, along with rising temps later in the week. The midwest will see snow several days this week, providing more sub-soil moisture for the wheat crop when it comes out of dormancy next spring. ---Vic Lespinasse
Saudi Arabia will be in the market Jan 5 for 500,000 tonnes of optional origin milling quality wheat. Various countries are in for optional origin wheat tomorrow and Pakistan is in at the end of the week for 500,000 tonnes of optional origin wheat.
The Nov Consumer Price Index report this am showed a drop of 1.7%, the largest monthly drop ever. This could be negative for all commodities, including grains, since it is deflationary and, by definition, deflation is a negative influence, just as inflation is a bullish one.
The Federal Reserve Board is expected to cut interest rates today with an announcement at 1:15pm, US Central time. This will impact the $ and could indirectly influence grains tomorrow. OPEC is expected to cut crude oil production in a meeting tomorrow, which could also influence the grains. The only question regarding the Fed and OPEC moves is "How much?" Keep watching the outside markets for guidance in the grains, even though the grains did show some limited independence yesterday.
Argentina will be mostly hot and dry the next several days although there is a little isolated rain in the forecast the next few days. The next chance of good rains comes this weekend, along with cooler temps. Corn and beans are being stressed in Argentina currently, increasing the need for rain soon. Brazil saw up to .6" light rain in Parana overnight, but it was dry elsewhere. Rain is forecast in the north the next two days, where conditions are favorable overall. More rain is forecast in the north this weekend but dry weather is forecast to return to the south, increasing the need for rain there again soon.
There is a cold weather threat in the southwest winter wheat belt the next day or two as snow cover is largely lacking to protect the crop. Light precipitation is forecast this week, along with rising temps later in the week. The midwest will see snow several days this week, providing more sub-soil moisture for the wheat crop when it comes out of dormancy next spring. ---Vic Lespinasse
posted by InsightPublishing at
8:48 AM
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