3 Big Things Today, January 24
1. Soybeans Decline on Technicals, Favorable Weather in Brazil
Soybeans dropped in overnight trading on technical trading and favorable Brazil weather while corn and wheat were higher.
Bean futures dropped on speculation that, while Argentina’s crop is under duress, improved weather recently in Brazil may give plants there a boost. The improved outlook in Brazil may be enough to overcome losses in Argentina, analysts said.
Brazil rains favored several growing areas over the weekend, and precipitation is expected to ease stress on crops in northeastern states, Commodity Weather Group said.
Some rain is also sneaking its way into forecasts for extreme northern Argentina in the middle of next week, the forecaster said. Still, rebuilding dryness is expected in growing areas in the South American country, which likely will keep prices underpinned for a while.
Soybean futures for March delivery fell 3¾¢ to $9.82½ a bushel overnight on the Chicago Board of Trade. Soybean meal futures declined $2.10 to $337.50 a short ton, while soy oil added 0.19¢ to 32.71¢ a pound.
Corn futures gained 1¼¢ to $3.52½ a bushel overnight.
Wheat for March delivery rose 2¢ to $4.23½ a bushel overnight in Chicago. Kansas City futures added 1¼¢ to $4.24½ a bushel.
2. New Trans-Pacific Partnership Puts Grain Exports to Japan at Risk, U.S. Wheat Groups Say
Eleven countries agreed to a sign a new version of the Trans-Pacific Partnership agreement in March, this time without the U.S., which wheat groups said puts exports of the grain at risk.
The so-called TPP 11 signed the agreement exactly one year after President Trump said he would pull out of the partnership. The deal is a “discouraging signa” to Japanese buyers of U.S. wheat, the U.S. Wheat Associates and National Association of Wheat Growers said in a statement.
The agreement includes major wheat producers Canada and Australia, Japan, Mexico, Vietnam, Malaysia, Chile, Peru, Singapore, Brunei, and New Zealand.
Japan imports, on average, 3.1 million metric tons of U.S. wheat annually. After full implementation of the new TPP, the Asian country’s tariffs on Canadian and Australian wheat would decline by about $65 a ton, the wheat groups said.
“That would put U.S. wheat producers at a total price disadvantage of more than $200 million per year from TPP alone,” U.S. Wheat Director of Policy Ben Conner said. “As the agricultural community warned when the president made the announcement, withdrawing from TPP was shortsighted and unnecessary, and now U.S. wheat farmers could take the hit.”
NAWG President Gordon Stoner said growers and other farm groups need to turn up the heat on the administration to ramp up trade negotiations with Japan.
The president, on the other hand, has said he wants to pursue bilateral agreements with Asian countries, including Japan.
3. Freezing Drizzle in Indiana, Illinois, Risks of Wild Fires in Kansas Prevail on Wednesday
Freezing drizzle is on tap for much of northwestern Indiana and central, east-central, and north-central Illinois this morning, according to the National Weather Service.
A “light glaze of ice” is expected on untreated roads, which may make travel dangerous, the NWS said in a report early Wednesday. The winter weather advisory associated with the drizzle will end at 9 a.m. as temperatures warm.
In the Southern Plains, meanwhile, gusty winds and low relative humidity will create a risk of wild fires this afternoon.
Winds in southwestern Kansas will gust up to 35 mph, the agency said. Combined with low relative humidity of about 14% and temperatures in the 60s, the risk is high that fires can spread rapidly.