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Wheat Continues to Inch Higher

Soybeans Turned Higher Overnight Trying to Recover from Losses

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Soybeans turned higher overnight trying to recover from 3 days of losses while wheat and corn were coming into the morning break mostly steady from yesterday’s close.

USDA announced the sale of 163,000 MT of soybeans to Unknown (60,000 MT for NC 2017), 112,000 MT of soybeans to Mexico and 125,000 MT of corn to Mexico.

Argentina’s dry spell is expected to persist Jan. 24 through Jan. 30. Temperatures are expected to be hot late this week, the weekend and early next week with upper 90’s and lower 100’s and possibly causing some crop stress. Areas of southern Argentina that missed meaningful rainfall this past weekend will have increasing crop stress.

In Brazil, conditions remain nearly ideal in key crop areas. Espirito Santo north through much of eastern and central Bahia will continue to miss meaningful precipitation. This, combined with the summer heat, will lead to more crop stress for this portion of the country.

The Chinese New Year gets going at the end of this week and coincides with a downtime in economic activity for the country. China did release their latest trade data for December. This showed Dec DDG’s were 70 TMT taking total year to date to 3.07 MMT off 55 percent on the year. Ethanol was 125 TMT taking total for the year to 890 TMT. Bean imports for Dec were 9.0 MMT taking total year to date to 83.9 MMT, up 2.7 percent on the year.

Wheat continues to inch higher mostly driven by short-covering. The recent weakness in the US Dollar has helped give a boost to wheat prices, as did a bigger than expected cut in US winter wheat plantings. Russian wheat prices have also shown a slow creep higher on low farmer sales there. But large US and global stocks continue to keep a lid on big rallies. Informa will release 2017 US acreage forecasts later today.

On Monday, the Trump administration withdrew from the Asian TPP trade deal and drew criticism from the ASA soybean association and the National Cattlemen's Association. The dollar steadied on Tuesday, recovering from a dip on fears that U.S. President Donald Trump's focus on protectionism over fiscal stimulus suggested his administration might be content to gain a competitive advantage through a weaker currency.

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