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This week's wheat rally streak was stopped in its tracks today after a bearish, risk-off day across the board. Grain news has remained QUIET over the week, as traders over the past few days took advantage of some technical bargain buying, only to give up nearly all of this week's gains today. Since last Friday, corn is up 3/4 of a cent, soybeans are down 4 cents, and wheat is up 7 cents.
The largest geopolitical risk we have seen as of late was tied to Red Sea freight risks, where Houthi Rebels have been attacking ships that were utilizing the Suez Canal. The fears eased a bit today on reports that Chinese officials asked Iran to help rein in the attacks on ships, which were hurting its trade with Europe and the Black Sea region. Today’s action indicates that the commodities still lack a story on their own sufficient to sustain a rally.
This morning, private exporters reported sales of 100,000 metric tons of soybean cake and meal for delivery to unknown destinations during the 2023/2024 marketing year.
Updated weather forecasts that show better rain chances for Argentina in early February. Brazil’s state of Paraná 2023-24 soybean crop estimate was reduced by 2.48 MMT to 19.24 MMT, down 2.7 MMT from initial forecasts and 14% lower than the 2022-23 season, according to state agency Deral.
Also in regards to Argentina, China for the first time has approved wheat exporters from Argentina. USDA projects total 2023/24 Argentine wheat exports at 10 million tonnes. That compares with Russia at 51 mmt and USA at 19.7 mmt.
The Seasonal Drought Outlook calls for drought improvement or removal across the Central & Southern Plains through April, especially in the northern 2/3 of Kansas. But drought is expected to persist in SRW areas of the Midwest.
In HRW areas, dryness/drought covered:
• 67% of Kansas (virtually no D3 or D4)
• 61% of Colorado (2% D3, no D4)
• 33% of Oklahoma (no D3 or D4)
• 52% of Texas (3% D3, no D4)
• 39% of Nebraska (no D3 or D4)
• 29% of South Dakota (no D3 or D4)
• 80% of Montana (no D3 or D4)
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