Back from the woodshed

Overnight the grain and soy markets are experiencing a welcome,
albeit minor reprieve after receiving a bit of a shellacking
yesterday.  Had there been additional news forthcoming concerning
business with China, we may have been able to postpone a corrective
break a bit longer but seeing that even with better relations in
the making, the fundamental picture does not shift dramatically,
for now, it seemed inevitable.  Yet again, the combination
corn/wheat/bean chart has reached to the edge of the river and has
turned back for now. I understand that the top trade aide for
Chinese President Xi is now scheduled to visit Washington on the
30th/31stof this month, assuming someone is there to negotiate


Speaking of China, they are the latest in a number of countries
that have published crop estimates this week and are expecting to
see quite a boost in their corn output.  For the 2018/19 crop
year, they are looking for production of 257.33 MMT of corn which
would be an increase of 20% over last year.  Too often we forget
that China is the world’s second largest producer for corn, with
the United States number one at 371.52 MMT according to the last
estimate.  Even with the increased output, they also raised usage
projections.  This still leaves them with a deficit of 1.5 MMT
that they need to import, but that is 1 million less than the
previous forecast.  For bean production they are only expecting a
slight increase in production, 16 MMT versus 15.83 last year but
are projecting that soybean demand will be 3% lower in the coming
year related to reduced soymeal demand due to the African Swine
Fever problems.  

Macros are generally supportive this morning with metal and
energies higher and the dollar lower.  More on that last market
in the weekly newsletter. 

Outside of that, there would seem to be little more ag-specific
news we can latch onto for now, so once again, here are the trade
estimate for the yet to be released January final production
estimates; U.S. corn production of 14.538 billion bushels from a
yield of 177.9.  This would be a reduction of 88 million bushels
from the last report.  The total bean production estimate is
4.568 billion from a yield of 51.75.  This would be 32 million
bushels lower than previous.  Ending stock projections fall in at
1.705 billion in corn- down 76 million, 913 million in beans-down
42 million and 990 million for wheat-up 16 million.  The average
estimates for the December 1stgrain stocks have corn pegged at
12.095 billion, beans at 3.734 billion and wheat 1.956
billion.  Argentine production is currently estimated to be 42.2
MMT for corn and 55.1 MMT for beans, and in Brazil, the current
estimates have corn at 93.9 MMT and beans 119.6 MMT.

Source: FS – All – Food and Nutrition Blogs
Back from the woodshed