Markets are mixed this am with corn down 1 and soybeans up 2 as the risk off trade continues to hang over the Ag markets as traders ponder the possibility of an the Iranians retaliating. We will get a look at the USDA’s final numbers for 2019 production on Friday. This should help underpin the market with the beans up 2, corn down 1 and wheat off 2.
The mullahs in Iran are not happy after the targeted assignation, but the Iraqis are also not happy leading to their parliament asking all non-Iraqi military forces to leave the country. President Trump is not pleased with move and threatened sanctions as the political relationship between the US and Iraq continues to deteriorate. The Iraqi’s have been a consistent buyer of US wheat over the years and it will bear watching to see how future tenders play out. This morning wheat is trading 6 lower.
The Chinese have formally acknowledged that they will send Vice Premier Liu to Washington on January 13th for a signing ceremony at the White House on the 15th. As good as it feels to put this whole thing in the rear-view mirror and move on, we cannot forget that there remain no specifics when it comes to just how the $80B in commodity purchases over the next two years will be broken down. Beijing is expected to begin allowing purchases of US Ag products within the first 30 days following the agreement, but how much of their recent buying spree in beans and pork/beef remains to meet their current needs.
The major weather models are in agreement in calling for favorable weather across South America. The EU model does look wetter for southern Brazil and Argentina over the next ten days with the GFS showing the rains arriving in the 11 to 15 day window. There is no extreme heat in the forecast with highs across Argentina expected to stay in the 80’s to low 90’s and mid-80’s and mid-90’s in for Brazil.
If you have not been marketing old and new crop bushels I would strongly suggest you step to the plate. Uncertainty in the markets are the only guarantee we have at this time. Be sure to get sales on the books and offers in with your buyers before Fridays USDA report. I would advise active selling in both old and new crop corn at current levels.
Have a Safe Day!