Morning Grain Comments, 01/25/2016

Monday, January 25, 2016

The grains started the week solidly before slowly giving way overnight as outside markets turned negative; only wheat is left on the high side this morning, at a bit of a technical crossroads to start the week, buoyed by the possibility of Russian grain exports slowing from their record pace.

A senior government official in China said today that the country will start “letting the market decide” its domestic corn prices, as soon as early this calendar year, by dropping domestic corn subsidies…

News from Russia late last week brought the possibility of some agricultural changes in the country due to hyper-inflation risk; they are considering tougher grain export limits (or adjusted export taxes) until new crops come online later this year, with strong concerns coming from the livestock sector.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle as of Jan 1 at 99.5% of last year, above the average trade estimate of 98.8%; December placements came in at 99.2% of LY, well above the average 94.7% trade guess and the entire 91.1-97.5% estimate range, while December cattle marketings at 101.1% of LY fell below the average 101.8% trade estimate.

Friday’s Disaggregated CFTC Report showed managed money traders adding net grain positions across the board on the week ending Tuesday (1/19), with corn up 32.2k—pretty close to the spot pegged by daily trade estimates for once. Beans added 28.4k there, more than double the expected net gain, while net gains were moderate across the rest of the complex. Producers and merchants added to shorts, resulting in cuts of 4.7k net corn and 25.7k net beans.

Soybean export sales declined last week to 36.2 million bushels, down just over five million from the previous
week; however, weekly sales totaled just half a million bushels on the comparable week last year, meaning cumulative bean sales since September 1 now stand less than 150 mbu behind last year’s pace. The USDA’s 25 mbu bean export cut in the January S&D report has their total year-toyear estimated export decline down to 143 million bushels...



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