Markets are mixed this morning with corn down 1 and soybeans up 2. There appears to be very little action in the markets as traders anxiously await Fridays report. Funds have reduced their short positions in corn and soybeans over the last couple weeks with the holidays and unknowns of where the Chinese tariff talks and potential war escalations with the Middle East may lead us. Last night’s Iranian missile strike on US bases in Iraq resulted in no casualties, but does have traders on edge wondering what if any follow up there will be from the US or Iranian leaders.
South American weather forecast has regular rain coming into the 18th f January. Argentina has moved back to a normal pattern seeing rains every few days. Southern Brazil is back to steady rainfall.
The sow herd in China expanded 2.2% from November and is up 7% from September. The hog herd was estimated to be down 41 percent from a year ago, but is slowly building back up. The curve on growth is going to steepen in coming months, with most all female pigs begin held back. Some estimate it will take years to build back up, but at the current pace it will be much quicker than that. This is what I believe will increase the demand for US soybeans long term.
This year’s crop quality is not good with light test weight and higher foreign material being seen across our draw area. This in addition to corn that dried down much harder than years past increases the possibility of grain going out of condition in storage. Producers should be actively monitoring their bins and coring more frequently than years past. I would advise moving your grain early and re-owning on paper if you believe the markets are going to improve.
Look for choppy trade to continue ahead of Fridays Report.
Have a Safe Day!