Information provided may include opinions of the author and is subject to disclosures found at the end of this document.

HIGHLIGHTS

·       TRENDS—Steady/firm bias. Del’y: SBM, 1485; SBO, 605; RR, 78; SB, 597 

·       What caught my eye: Dryness and moisture deficits in much of Brazil’s Rio Grande Do Sol state have many thinking the country’s first crop (safras) could fall a million or so short of the current 26 MMT estimate

·       Chinese central bank lowers reserve requirement; mfg expansionary for 5^th  months. Asia: Mixed: Nikkei, NA; Shanghai, +1.15%; Hang Seng, +1.25%; EUROPE: Higher—DAX, +0.78%; FTSE, +0.96%; CAC, +1.25%.  WALL STREET Futures look quite positive—DOW, +163; S&P, +18.75; NAS, +61.25.  EXTERNALS: Mar crude: +$.20 @ $60.97; Gold: +$6.80 @ $1,525; $ Index, +.189 @ 96.634

·       T-storm Weather®: the next round of thunderstorms in Argentina is 10 to 14 days out with significant totals expected, but limited totals until then leave most areas drier than normal over the next two weeks (though recent rains were heavy).  In Brazil, despite heavy rain central and north over the next week, rains the following week will likely be less organized as high pressure re-forms, leaving most only near to drier than normal.  Southern Brazil and Paraguay will be drier than normal for 7-10 days (but not hot)

• CH, dn $.0050 @ $3.8775 Tue; CK, dn $.0050 @ $3.9475 Tue.  The funds sold 1 K on the last trading day of 2019      
• SF, up $.0350 @ $9.43 Tue; SH, up $.03 @ $9.5550 Tue.  Funds: Bot 2 SB, 3 SBM, sold 6 SBO.  Board crush: $0.96, -6; LY, $0.93,-3; 
• WH, up $.0275 @ $5.5875 Tue, WK, up $.0275 @ $5.6175 Tue.  The funds bought 3 K Tuesday, short-covering          

CORN/SORGHUM

​ ·       Consultant: Argentina 2019/20 corn crop est. is unch at 47.5 MMT with a neutral bias.  Driest southern cropping areas did receive some good rains over the weekend, but it’s uncertain if it will be enough to fully re-charge soil moisture

·       T-storm Weather®: In Argentina, dry & cool high pressure dominates the next 7-10 days.   Changes follow Jan. 8-10 as a storm system and/or cool front trigger the next round of rain, most likely producing 0.75”-1.50” within a wide area

·       ATI Research: updated ending stocks estimate for 19/20 U.S. corn is 1.919 bbu vs. December USDA est. of 1.910 bbu

·       The Weekly Petroleum Status Report will be released on Friday, January 3

SOYBEANS/WHEAT

·       Consultant: Brazil 2019/20 soybean production est. is unchanged at 123.0 MMT, with a neutral to possible lower bias going forward.  There are two areas that need rain; northeast and the southernmost state Rio Grande do Sul

·       T-storm Weather®: in southern Brazil, rain over next two weeks is forecast at 1.50”-2.50” for soybeans across Rio Grande do Sul, but ~3.50” is normal; thus, drought intensifies in Rio Grande do Sul, & dryness is monitored elsewhere

·       ATI Research: updated ending stocks est. for 19/20 U.S. soybeans is 0.424 bbu vs. December USDA est. of 0.475 bbu

·       ATI Research: updated ending stocks est. for 19/20 U.S. all wheat is 0.982 bbu vs. December USDA est. of 0.974 bbu

·       T-storm Weather®: above-normal water-equivalent totals (1.25”-2.50”) fall the next 2 weeks on most U.S. SRW wheat 

ENERGY

·       Firm: CLH20, +$0.20 @ $60.97; EBH, +$0.32 @ $66.32; EBH-QCLH, +.13; RBH, +.0196; NGH, -.008; HOH, +.0115

·       Chicago ethanol was $.016 lower at $1.36; basis values versus Chicago were all firmer:  NYC, +.0285 @ $.16; Gulf, +.01 @ $.11; Dallas, +.0060 @ +$.065; Tampa, +.0060 @ +$.16; LA, +$.0160 @ +$.24

·       Ethanol RINs values were mixed: 2018’s, +0.25 @ 4 ½-5; 2019’s, -0.375 @ 8 ½ -9 ¼; 2020’s, -0.50 @ 15 -16                                     &nbs​p;                        ​;                         ​;                      ​

·       The February RBOB/January ethanol spread lost $.0380 cents as it narrowed to $.31550/gallon Tuesday       

LIVESTOCK/POULTRY                     &nbs​p;                 

• Choice boxed beef eased 24-cents on Tuesday to $209.42 and is down $2.15 versus a week ago
• February live cattle futures on Tue. closed at $125.925, up $0.10 compared to the previous week

·       USDA mandatory pork carcass cutout value declined $1.98 on Tue. to $72.17 and is $3.79 lower versus a week ago

·       CME Lean Hog Index fell $0.24 on Tue. to $57.93.  February futures eased $0.375 but remain $13.495 above the index   

Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather®