谷粒Continue to Grind Lower

谷物磨低隔夜with losses of 2 to 3 cents in light trading ahead of Tuesday’s USDA crop report. In outside markets, S&P futures posted solid gains while crude oil continued to sink.

Rain fell in much of Brazil at one time or another over the weekend Rains ranged from 0.6 inches in several areas in northern and eastern Minas Gerais, Goias and Mato Grosso, which led to net drying. Rain fell more significantly in other areas with nearly 2.00 inches in south-central Bahia where moderate to heavy rain occurred late last week and from Sao Paulo to Mato Grosso do Sul and Parana where 1.00 to 2.50 inches resulted. The next two weeks shows a drier bias in southern Brazil during the next couple of weeks while frequent bouts of rain occur in northern parts of the nation. This overall patterns is favorable for crop growth as the South has seen excessive rain, while northern regions have been dry.

Argentina saw sporadic rainfall over the weekend but is expected to see more rain on Monday and Tuesday. Most of the nation is in good shape for crop development during the next couple of weeks.

Overnight there was some tender news with Jordan in the market fort 100,000 MT of milling wheat, and a South Korea feed group looking for 130,000 MT of corn of optional origin.

Tuesday brings USDA’s latest supply and demand report, its final US corn and soybean production forecast for 2015, and the winter wheat seeding report for 2016. Analyst expectations show very little change in previously held estimates with only modest upticks in US wheat and soybean carryout expected, and US corn carryout expected to be unchanged. The reports will be released at 11 am CDT on Tuesday, Jan 12.

Oil prices fell for a sixth session to trade at almost 12-year lows on Monday as slowing growth in China rattled investors' hopes for demand this year and traders increased bets against any near-term recovery. Morgan Stanley said on Monday that oil prices in the $20s were possible, especially if the dollar surges more against other currencies. "A 15 percent CNY (Chinese yuan) depreciation alone could send oil into the $20s," the bank said.

The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a dba of Foremost Trading LLC (NFA ID: 0307930)

—Kevin McNew