HIGHLIGHTS

·      TRENDS—Weaker: CH, unch; SH, +$.0475; WH, -$.0475; KWH, -$.0325 

·      What caught my eye: A growing number of analytical types are said to be posing the question as to whether or not China will use the coronavirus outbreak to invoke the Phase I trade deal “escape clause”.  SH “IS down nearly 50 cents since mid-January

·      Most markets follow yesterday’s Wall Street lead.  Asia: Mixed: Nikkei, +0.71%; Shanghai, closed; Hang Seng, -2.82%.  EUROPE: Firm—DAX, +0.16%; FTSE, +0.23%; CAC, +0.44%.  WALL STREET: Futures, Higher—DOW, +68; S&P, +9.25; NAS, +47.32.  EXTERNALS: March crude, +$.48 @ $53.96; Gold: unch @ $1,569; $ Index, +.074 @ 98.092 

• T-storm Weather®: Argentina receives some t-storms over the next 36 hours and Mon.-Tue., but only scattered and light totals fall, leaving a wide area drier than normal over the next two weeks, though soils are moist and coolness continues. Cool fronts produce near- and above-normal rainfall in Brazil (and Paraguay) over the next two weeks.  Most rain in central/northern Brazil is back-end loaded one to two weeks out, resulting in mixed weather for corn and soybean growth, harvesting, and planting
•  CH, unch @ $3.8650; CK, dn $.0025 @ $3.9175.  Funds buy 6 K with a positive macro take getting more credit than exports   
• SH, up $.0475 @ $8.9975; SK, up $.0475 @ $9.1375.  Funds: Sold 3 K SB; 1 K SBM and 2 K SBO.  Board crush: $1.06, +2; LY, $0.97,-; 
• WH, dn $.0475 @ $5.65; WK, dn $.0450 @ $5.64.  The fund selling continues, 2 K Monday & 4 K Tuesday           

     CORN/SORGHUM

·      “My Eye, (2)” . . . Gulf corn at $178.75/MT is the cheapest origin in the world; but with ocean freight added, Ukraine corn is still some $9.50 less expensive in shipping to Far East destinations such as Japan and South Korea

·      ATI Research: Prior LARGE SON feed/residual years suggests the DJF quarter could be up 150 mbu or more, versus LY

• Consultant: the cost of producing the safrinha corn crop in Mato Grosso at least, will rise nearly 11% in the coming year to approximately $244 per acre, mostly the result of an 18% increase in fertilizer costs
• He also suggests Brazil’s domestic corn prices could reach record levels in April-June, very tight supplies

 

SOYBEANS/WHEAT

·      Consultant: according to a cooperative group in RDGS, the soybean crop will be nearly 19% less than their prior estimate which had called for a 13% decline from last year

·      One consulting firm sees Brazil exporting 77 MMT of SB in 2020, with 62 million destined to China

·      T-storm Weather®: scattered t-storms dot central/northern Brazil next week; heavier amounts begin next Tue.-Thu. in central and northern Brazil; with heavy amounts expected in southern Brazil and Paraguay Wed.-Mon., then drier

·      T-storm Weather®: Rain/slushy snow are in progress for OK and southern KS but temperatures will soar to the 60s-70s on most feedlots by the weekend and then followed by seasonable coldness next week

ENERGY

·      Up: CLH20, +$.48 @ $53.96; EBH, +$0.60 @ $60.11; EBH-QCLH, +.13; RBH, +.0177; NGH, -.017; HOH, +.0078

·      EIA Report Estimates (API): crude oil, +0.5 (-4.3); Gasoline, +1.3 (+3.3); Distillates, -1.1 (-0.1).  Estimates for ethanol prod. avg. 1.052 mbpd (range: 1.027-1.065).  Avg. est. of ethanol stocks: 24.240 mb (range 24.000-24.522)

·      Chicago ethanol rose $.01725 on Tuesday to $1.30725; basis values vs Chicago were mixed:  NYC, -$.00475 @ $.13525; Gulf, +.00275 @ $.13775; Dallas, +.00525 @ +$.10525; Tampa, +.00275 @ +$.19775; LA, -$.00225 @ +$.228

·      Ethanol RINs values unch/down: 2018’s, unch @ 9 -10; 2019’s, -.125 @ 10 ½ -11; 2020’s, -0.125 @ 16 ¾ -18                             &nbs​p;                        &nbs​p;                        ​;                        ​               

·​;      The February RBOB/February ethanol spread was $.0092 wider yesterday, closing at $.1892       

LIVESTOCK/POULTRY                            &n​bsp;           

• Choice boxed beef was off 74-cents Tuesday to $212.85, and is down $1.66 compared to last week  
• The spread between February Lean Hog futures & the CME Index lost (.175) to ($4.485) yesterday

·      USDA mandatory pork carcass cutout value fell $1.51 on Tue. to $75.05, and is $2.32 lower versus a week ago

·      Current nearby board hog crush value is $48.58/cwt vs. last week’s $49.11, last month’s $52.81 & last year’s $37.32      

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