In the overnight session the grains are lower with corn down 3 ¾ cents, soybeans down 7 ¼ cents, Chicago wheat down 6 ½ cents and Kansas City wheat down 7 cents. Weather forecasts show rains are expected in Argentina for the second half of this week and temperatures in the central Plains in the U.S should not be enough to cause winterkill.
Exporters sell 130,000 metric tons of corn for delivery to South Korea during the 2017/2018 marketing year - USDA
Exporters sell 198,000 metric tons of soybeans to unknown destinations of which 132,000 metric tons for 2017/2018 delivery and 66,600 metric tons for 2018/2019 - USDA
Last week was hot and dry in Argentina which depleted topsoil moisture throughout the country and triggered price volatility in the futures market. Over half of the crop production area is now experiencing crop stress with serious stress occurring from La Pampa into western Buenos Aire, Northwest Santa Fe and southeast Santiago del Estero. Precipitation is expected in Argentina in the second half of this week bringing scattered thunderstorms and showers to around 20% of the growing region. More rain is expected from Friday to Sunday which is likely to cover some of the driest areas and bring between .3 and .8 inches of precipitation. Temperatures are also expected to cool into the 70’s and 80’s in the southern growing regions. Despite the forecast for moisture in the second half of the week, Argentina crops will still be under stress over the next couple days and there is no guarantee that the forecast will materialize in the regions that need it most.
Last week’s commitment of Traders report showed that for the week ending January 30th managed money reduced their net short position to 130,942 from 219,676 in the previous week. The latest COT report showed one of the largest week of short covering outside of the growing season. Soybeans also saw significant short covering moving from a net short position of 81,538 to 21,849 contracts short. Money managers also decreased their net short position in wheat from 15,962 to only 1,897.
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)
