HIGHLIGHTS
· Market Trend: Corn, Up 2, Soybeans, Mixed, 1 Higher; Wheat, 2-3 Higher
· Liquidity injection bolsters Chinese stocks as the Shanghai Composite surges 2.2%. Optimism carried over to other Asian markets with the Nikkei up .2% and the Hang Seng gaining a like amount. Europe is off to a positive start with the region’s 3 major bourses all up .2 to .4% this morning. Yesterday the IMF boosted its global growth forecast .1% to 3.7%, citing better than expected gains in the U.S., Japan and the euro zone. The IMF also sees higher Chinese growth, raising that estimate .3% to 7.5%. U.S. indices futures are currently in the red: S&P, 2 lower; the Dow, off 38 and the Nasdaq, ½ lower. Externals: gold is 50 cents cheaper at $1,241.30; energies are higher and the $ Index is off .021 at 81.205.
· T-storm Weather: Heavy thunderstorms erupt tonight and Thursday across Argentina; 1.00” – 2.00” of rain is very likely. An unseasonably cool pattern follows for 5 days as maximums stay in the 70s and 80s (20°F - 25°F cooler than in recent days), though temps moderate to near-average levels as next week progresses. The next rain chance is difficult to assess, but the climate of Argentina turns wetter through February and the close alignment of the jet stream warrants at least a low chance for thunderstormsJan. 28-30. To the north, thunderstorms break a hot, dry pattern across South Brazil & Paraguay Friday-Sunday
· Mar Corn Up $.0225 at $4.2725; May Up $.02 at $4.3425. Funds were even on Monday
· Mar SB Down $.0025 at $12.8025; May SB Steady at $12.64. Funds sold 10 K SB, 8 K SBM and bought 5 K SBO
· Mar Wheat Up $.0250 at $5.6475; May Wheat Up $.0225 at $5.7125. The funds sold 2 K
CORN/SORGHUM
· March 2014 corn futures closed Monday at $4.25. That’s up almost 5% from the low of $4.06 ¼ made on Jan. 10 prior to the release of the USDA reports but more than $3.00 below the $7.28 ½ close of March 2013 futures a year ago
· ATI Research: 13/14 corn carryout down 101mbu vs. last week to 1.555Bbu; but 14/15 up 32 million to 1.967Bbu
· ATI Research: Our export model continues to suggest weekly corn exports of 35 million per week over the next month; we think 25 per week is more realistic
· Export Inspections; Corn, 29.8mbu (28.9 needed), China took 137 thou bu. Milo, 1.7 (3.6) with China in for 526 thou
SOYBEANS/WHEAT
· ATI Research: The soybean export model indicates 58-66 per week over the next month. Our bias is not quite as aggressive as the model and is in the 50-55 million range
· ATI Research: 13/14 soybean carryout is unchanged from last week at 1403mbu but 14/15 down 62 to 317mbu
· Export Inspections: Soybeans, 56.6mbu (14.2 needed) with China taking 33.3
· T-storm Weather: Agricultural drought continues to expand across U.S. HRW wheat areas of the central and southern Plains; 43% of production was drier than average over the last 90 days, especially in Nebraska, Oklahoma and Texas
· ATI Research: 13/14 HRW wheat carryout pegged at 207mbu with 14/15 forecasted at 246mbu
· Export Inspections: Wheat, 15.6mbu (17.9 needed); no shipments to China
ENERGY
· Energy markets are firmer: QCLH14,+$0.45 at $95.43; QRBH, +$0.0170; QNGH,+$.074 and QHOH, +$.0191
· Additional weakness was seen in cash ethanol markets compared to Friday: Chicago 8 lower; Tampa off 17; Gulf was down 7; Dallas declined 15 ½; New York dropped 3 ½; & LA continued to slip, falling 14 to $2.25 ½ per gallon
· Slightly higher tone in RINs: 2012’s up ¾ to 30 ½-32; 2013’s up ½ to 31 ½-32 ¾; and 2014’s firmer by ½ at 31-32
· The February RBOB/February ethanol spread was little changed at $.7356/gallon on Tuesday
LIVESTOCK/POULTRY ; </wbr>
· Choice boxed beef values gained $3.16 yesterday to set a new record high for a ninth consecutive day at $239.72
· USDA 5-area weekly average steer price for LW was $142.50, up $2.82 and a new record high for a 4th week in a row
· After increasing $3.21 over the previous three days, the USDA pork carcass cutout value eased 83-cents yesterday
· The USDA’s Iowa/Minnesota average cash lean hog price gained $0.70 yesterday to $78.91
Sources: Bloomberg, Dow Jones, AP, T-storm Weather