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3 Big Things Today, January 26

Grains Higher in Overnight Trading; Greenback's Decline May Give Sales a Boost.

1. Grain Futures Improve Overnight as Dollar Continues Slump

Grains were higher in overnight trading as the dollar continues its slump, boosting prospects for improved export sales.

The Weekly Export Sales Report from the USDA was delayed by a day due to the government shutdown. It will be released this morning. Analysts said they’re expected decent sales because of the dollar weakness.

“Recent pressure on the U.S. dollar will give a nice uptick in weekly export sales,” Cory Brantland, an analyst at Kluis Commodities, said in a note to clients early this morning.

Wheat for March delivery rose 2¾¢ to $4.37¼ a bushel overnight on the Chicago Board of Trade. Kansas City futures gained 3¼¢ to $4.38¼ a bushel.

Corn futures added ¾¢ to $3.56 a bushel overnight.

Soybean futures for March delivery rose ¼¢ to $9.92½ a bushel. Soybean meal futures gained 20¢ to $340.60 a short ton, while soy oil added 0.11¢ to 32.61¢ a pound.


2. Greenback Continues Decline on Mnuchin Statements, May Boost Sales of Ag Products

Commodity markets are all about the dollar this week as the greenback continued its decline to the lowest value in more than three years overnight, prompting speculation that demand for U.S. goods will improve.

Treasury Secretary Steven Mnuchin said earlier this week that the value of the greenback wasn’t a concern of his, and he correctly pointed out that a declining dollar generally boosts demand for dollar-denominated products, which includes corn, soybeans, and wheat.

That caused the currency to slip to the lowest value since December 2014.

President Trump said on CNBC yesterday, however, that the dollar is going to “get strong and stronger.” Mnuchin, for his part, said on Friday that his comments were “completely taken out of context.”

Despite their backpedaling, the value of the greenback fell another 0.5% overnight, again pushing to new cycle lows. Analysts said that, hopefully, will give sales of corn, soybeans, and wheat to overseas buyers (which have been dismal so far this year) a boost.

The USDA will release its Weekly Export Sales Report this morning, a day late due to the government shutdown, but the report only will cover sales through January 18, so the impact of the weaker dollar may not be felt for another week or two.


3. Arctic Air Heads to Upper Midwest This Weekend, Separate Storm Bound For Plains

Arctic air is expected in parts of the Upper Midwest this weekend that will “usher in a new round of frigid temperatures,” the National Weather Service said in a forecast early this morning.

A storm system will move through the Rockies, producing snow over the region today, but will move east into the Upper Great Lakes by Saturday evening.

A separate front, meanwhile, will move over the Northern and Central Plains into the lower Great Lakes and Ohio Valley by Saturday evening. Precipitation will move up from the western Gulf of Mexico into the Southern and Central Plains, the NWS said.

Still, until any moisture arrives, the Southern Plains is still in a red-flag warning due to low humidity and strong winds today, according to the agency. Relative humidity is expected around 12%, while winds will gust up to 35 mph. Open fires are not advised.

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