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1/14/24 Morning comments

•  grains are soft overnight. Quiet trade.

• Yesterday’s 7.3 flash soybean sale to China was quite welcome as “known” PRC O/S sales through January 2nd had fallen to 85 mbu, less than half the same date 23-24 total and the 2nd lowest total (64 in 19/20) since China emerged as the world’s largest importer back in 2006/07. Currently it looks as if a “worst” case S AM production result will still boost output by a minimum of 10 MMT vs LY, leaving U.S. exports 1.1 to 1.2 Million metrics tones short of the USDA’s 1.825 bbu # unless there is MORE PRC reserve buying.

• Brazilian crop agency Conab on Tuesday raised its forecast for domestic soy production in the 2024/2025 season to 166.32 million metric tons, citing good weather and a minor adjustment in the growth of the oilseed's planted area. The new forecast for soy production in Brazil, the world's biggest producer and exporter, is 12.6% higher than the 2023/24 harvest and a record. This season, Conab estimates cultivated area of 47.4 million hectare (117.1 million acres), an increase of 2.7% compared to the previous period. In December, Brazil's soy area growth was pegged at 2.6%. The agency also said Brazil is poised to export more than 105 million tons of soybeans in the season, a much larger volume than the 98.6 million tons of last year, on ample supplies. Most of Brazil's exports go to China.

• Argentina's soybean and corn crops will have to endure a heat wave over the next few days that will affect their yields, leading meteorologist German Heinzenknecht said on Monday, before rains bring some relief by the start of the weekend. Argentina, a major world supplier of soy, corn and wheat, has seen its main agricultural region face a prolonged dry spell since the onset of the Southern Hemisphere's summer last month. Heinzenknecht, a meteorologist at the CCA climate consultancy, predicted that a front of rain would come in on Friday, ushering in the start of a normalization in rainfall. "This is the toughest week," Heinzenknecht said, forecasting highs of 36 degrees Celsius (97 degrees Fahrenheit) and up to 40 C (104 F) in some parts of the country. "Adding in the lack of water, as it hasn't rained in the core agricultural zone since Dec. 23, its an explosive combination," he said.

Corn:
• March corn futures closed at $4.7650 on Mon., which is the highest settlement price since June 18
• ATI Research: 24/25 U.S. corn ending stocks are estimated at 1.528 bbu (USDA: 1.540)
• Consultant: Argentina 2024/25 corn production estimate is lowered 1.0 million metric tones to 49.0 million metric tons; neutral to lower bias going forward
• corn that was planted in October is pollinating and will be negatively affected by current hot temps and limited rain
• corn that was planted in December is approaching pre-pollination and will need more rain for pollination
• Funds buy 8 K on Friday’s report follow-through; beans/SA weather

Soybeans:
• Multi-month highs were made in the soy complex on Monday
• March beans closed at $10.53—highest price since Oct. 7
• March soyoil closed at 45.99—highest price since Nov. 12
• ATI Research: 24/25 U.S. soybean ending stocks are estimated at 0.440 (USDA: 0.380)
• Consultant: Brazil 2024/25 soybean production estimate is lowered 1.0 million metric tons to 170.0 million metric tones; neutral bias going forward
• dryness concerns in Rio Grande do Sul, Paraná & Mato Grosso do Sul
• harvest at 0.2% vs. 2.3% last year & 1.5% avg. (Patria Agronegocios)
• Funds bot 12 K SB, 3 BO, 8 SM. Jan Board Crush, -$.02 @ $1.19

Financials:
 The major stock indices are positive ahead of the opening; “gradual” tariffs in the cards?
WALL STREET FUTURES - Firmer:
Dow, +113; S&P, +21.5; NAS, +90
Asia - Mixed:
Nikkei, -1.46%; Shanghai, +2.54%;
Hang Seng, +1.83%
EUROPE - Firmer:
DAX, +0.8%; FTSE, +0.07%; CAC +1.12%
February Gold: +$0.4 @2,679
February CRUDE: $-0.45 @$78.37
Mar U.S. Dollar Index: -0.397 @109.812