HIGHLIGHTS
· Market Trend—Corn, Mixed; Soybeans, Mixed; Wheat, 3-4 Lower
· Well, today’s “take” seems to be that the Fed will maintain its current level of bond buying—e.g., if no cut this afternoon then perhaps by March: the Nikkei surged over 2% to nearly 15,600; the Hang Seng ended .3% higher while Shanghai Composite slipped .1%. Europe is off to a positive start: the DAX is nearly a full % point to the plus side—business confidence rising; the FTSE is up .2% and the CAC is .75% higher. Futures here at home have the Dow up 40; the S&P is 4 ½ higher and the Nasdaq, up 7. Gold is trading near the $1,232 level, up .14%; energies are a tad firmer and the March $ Index, up .031 at 80.245
· Weather: The two-week outlook for South America shows little sign of improving. Argentina will continue to trend drier and will be virtually without rainfall through Sunday. Additional, if not frequent rain amounts will move across the already saturated areas of northern Brazil during the next week. Central Brazil will see daily showers. Hot and wet conditions are promoting the spread of Asian rust. Of most concern, southern Brazil and portions of Paraguay will dry down through the end of the month. Temperatures will be very warm to hot in portions of western Rio Grande do Sul and southern Paraguay this week, creating some crop stress. More currently, rain occurred in northern and eastern Entre RiosMonday and Tuesday but the remainder of Argentina was dry and hot. Brazil rainfall on Monday/Tuesdayvaried by region with the central portion receiving additional rains, especially in Mato Grosso to Minas Gerais and Espirito Santo. Southern Brazil and Paraguay saw restricted amounts.
· Mar Corn Down $.0025 at $4.2650; May Down $.0025 at $4.35. The funds bought an estimated 3 KTuesday
· Jan SB Up $.0025 at $13.47; Mar SB Up $.0025 at $13.35. The funds bought 8 K SB, 7 K SBM and sold 6 K SBO Tuesday
· Mar Wheat Down $.0325 at $6.1650; May Down $.0325 at $6.2275. Funds were even yesterday
CORN/SORGHUM
· ATI Research: Year-to-date U.S. corn export sales are 1.051bu, which is a record 72% of the annual USDA forecast for this point of the marketing year. Previous highs since 2000 were close to 58% in 07/08 and 55% in 11/12
· Implied corn grind for ethanol in the latest reporting week increased 2.4mbu to 102 million per week and was up 13 million versus a year ago
· T-storm Weather: An unusually-large growing area in Argentina turns drier- to much-drier-than-usual this week. Remaining corn planting advances but at the expense of diminishing soil moisture
· Private consultant notes the developing dryness in Argentina could become a problem for corn pollinating in 2-3 weeks if it remains hot and dry. Also sees the possibility of a switch in acreage from corn to soybeans
SOYBEANS/WHEAT
· ATI Research: Year-to-date U.S. soybean export sales are an all-time high of 1.422Bbu and nearly 200 million above the previous same-date record of 1.230Bbu in 10/11
· T-storm Weather: Heavy rain affects northern soybean areas of Brazil this week; some flooding is possible in Bahia
· ATI Research: Survey suggests a significant decline—perhaps 10%--in U.S. SRW wheat planted acreage vs. a year ago
· T-storm Weather: Heavy to very heat rainfall of 1.50”-3.00” to affects U.S. SRW wheat from the Delta/Southeast northward through key areas of the eastern Corn Belt this weekend
ENERGY
· Energy markets—a little firmer: QCLF14,+$0.08 at $97.30; QRBF, +$0.02; QNGF, +$.011 andQHOF, +$.0123
· EIA estimates (API): crude oil stx, -2.7 mb (-2.5); gasoline, +1.8 mb (-0.5); distillates, +0.6 (-0.4)
· Cash ethanol markets traded mixed: Chicago and the Gulf were 2 to 2 ½ cents higher; both Dallas and LA were unchanged from Monday with NY and Tampa each losing 2 cents
· RINs edged higher: 2012’s were up 1 to 29-29 ½; 2013’s gained ¼ to 29 ¼ to 29 ¾; 2014’s were 1 ¼ higher, 29-30
· The January RBOB/January ethanol spread firmed up 3 1/3+ cents to $.8342/gallon yesterday
LIVESTOCK/POULTRY ;
· After gaining $1.08 the day before, Choice boxed beef values fell $1.54 yesterday
· Cash cattle are quiet with feedyards asking around $133, but no packer bids reported. Cattle traded LW at $131
· After jumping $3.81 on Monday, the USDA mandatory pork carcass cutout value eased 15-cents yesterday
· The USDA’s Iowa/Minnesota average cash lean hog price gained $1.65 yesterday to $78.23
Sources: Bloomberg, Dow Jones, AP, T-storm Weather