In the overnight session the grains trade higher with corn up ¼ cent, soybeans up 3 ¼ cents, wheat up 2 ¼ cents and KC Wheat up 2 ½ cents. Corn rallied sharply yesterday and is well above the 20 and 50 day moving average as short covering powered most of the days action. Export sales will be released on Friday the 26th due to the temporary closure of the Federal Government.
The weather forecast in Argentina is still looking for more precipitation in the northern part of the crop growing region with only minor shower and thunderstorms in the central and southern regions. Next week is expected to be dry which will increase stress on the crops in the central and southern growing regions.
Ethanol production was mostly unchanged week over week at 1.062 million barrels per day. This was another strong week following the freezing temperatures that strained logistics in the first half of January. The ethanol production for this week was 1% over last year during the same week. Ethanol stocks increased sharply this week to 1 billion gallons from 955 million last week.
Chinese customs data released on Thursday showed that China imported 60 percent of its soybean from Brazil in 2017 with the U.S. accounting for only 34.4 percent of imports. Unfortunately, that was the U.S’s lowest percentage share of China’s total soybean imports since 2006. Brazil surpassed the U.S. as the primary supplier to China in 2012 and currently has an edge over the U.S due to its longer growing seasons, higher protein content and cheaper prices. Although Brazil is slightly behind normal harvest pace at this time of the year the growing season has been very favorable and the country is gearing up for another very large harvest.
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