Grains Higher as Inflation Data Better

MORNING OUTLOOK

Grain futures are higher. SF is up 26 cents and near 14.49. SMF is near 406.1. BOF is near 74.45. CH is up 6 cents and near 6.65. WH is up 5 cents and near 8.30. KWH is up 8 cents and near 9.29. MWH is up 5 cents and near 9.50. Risk off risk on? US stocks are higher. US Dollar is lower. Crude, gold, silver, copper, cocoa and cotton are higher. US inflation data still high but below expectations. Happy Days are here again?

US PNW and north plains blizzard could slow grain movement. Florida hurricane will move into SE with above normal rains. US south plains is dry. Argentina and Brazil could see rains. France could see rains. Rest of EU and Black Sea is dry. 2nd week shows subzero temps across most of Russia and Ukraine.

China saw another good new domestic soymeal trade day. News that if strict Covid restrictions are imposed, China could restore normal way of work and life as soon as possible may be helping soybean futures recoup yesterday losses. China needs to buy 2-4 mmt of soybeans for January. Brazil President wants no caps on spending but no plan to pay for it could push Brazil into a recession. Argentina farmers is not selling beans on talk that government could impose another soy peso deal which in Sep increased farmer selling by 7 mmt.

Corn futures are higher and taking back Thursday losses on talk that Russia may not agree to extend the Ukraine export corridor and continues weak US Dollar. US corn export commit is down 54 pct from last year. EU corn crop is down 20 mmt vs ly. Imports to date are up 7 mmt. Some feel they will need to import 30 mmt. That could tighten global supplies. Argentina crop was rated 6 pct G/E vs 84 ly. 23 pct of crop is planted vs 35 average. Rains are helping conditions. Dry next week. Ukraine and Brazil corn prices are below US.

It is almost impossible to trade wheat futures especially to hedge risk. Talk that Russia may not agree to extend Ukraine export corridor is supportive. Lower US Dollar is also supportive. There is a meeting today to talk about the corridor extension but Russia may wait to make a decision at G20 meeting. US HRW crop areas are dry. Heavy rains in US SE and winter blizzard in north plains. Saudi tender may exclude Australia and EU. Russia is cheapest. India may drop their 40 pct import tax due to record high domestic flour prices. Argentina wheat crop was rated 8 pct G/E vs 50 ly. BAGE est the crop at 12.4 mmt vs Rosario 11.8 and USDA 15.5. US wheat export prices are $45 above Russia. US export commit is down 6 pct vs ly.

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