The first trade day of the new year saw a continuation of last year’s trend with equities, the US dollar, and crude oil shooting higher, while grains languished and soybeans moved lower.
Soybeans at one time was as much as 8 cents higher before turning lower going into the break. Brazil is likely to see some rains to help limit dryness in Brazil, while Argentina has seen widespread rains. More rain is expected in Argentina for the next week to add to the 10 inches of rain that has fallen in the last two weeks. Argentina still has some acres not planted which may put those acres at risk.
In Asia, palm oil, and China soy and meal futures were off sharply overnight. Argentina will start cutting its soybean export tax by 0.5 percentage point every month for two years starting in January 2018, resulting in a 12-point reduction to 18 percent by the end of 2019, the government said in a decree on Monday. When free-market proponent Mauricio Macri became president in December 2015, he cut the tax to 30 percent from 35 percent. He promised at the time that he would keep chopping the levy by 5 percentage points per year every year of his administration. But budget concerns have put that plan on hold.
Taiwan's MFIG purchasing group has issued an international tender to buy 40,000 to 65,000 tonnes of corn which can be sourced from the United States, Argentina, Brazil or South Africa. Algeria's state grains agency OAIC has issued an international tender to buy optional-origin soft milling wheat.
The tender sought a nominal 50,000 tonnes but Algeria often buys considerably more in its tenders than the nominal volume sought.
Global equity markets were up sharply which helped push US equity futures. Chinese PMI was up better than expected suggesting manufacturing was running strong.
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