** AgResource Pre-Opening Sunday Calls: Soybeans, corn and wheat are called 1 cent lower to 1 cent higher.
** Weekend Weather & CBOT Market Discussion: Opening CBOT calls are mixed. CBOT values this week are all about politics – namely US/China trade politics.
The US trade team has arrived in Beijing and are prepared for meetings that start overnight. The initial discussions include the working members of USTA/Treasury, with USTR Amb. Lighthizer and Treasury Sec. Mnuchin to arrive for high level Gov’t discussions on Thur/ Friday. If these high Gov’t level talks go well, ARC assumes that the talks could continue in the US in the following week. It’s a full court press to reach a deal that both sides can bless.
Weekend news that would impact the CBOT was limited. Overnight, the Russian Ag ministry will hold its monthly meeting with exporters while CONAB is out with their Brazilian corn and soybean production estimates on Tuesday. ARC looks for CONAB to lower their ‘19 soybean crop estimates by 1.5-3.0 MMTs from their early January forecast due to adverse weather. The attached chart reflects percent of normal rainfall in the timeframe of February 1-24th.
**Feb 1-24 % of Normal Rainfall:
** South American Weekend Weather Forecast: The Brazilian/Argentine weather pattern flipped last week which helped stabilize Brazilian soy yields and increase Argentine corn/soybean crop potential into late February.
The favorable pattern will last for another 10-12 days, but there are hints in the extended range that drier upper air flow could return to Brazil as the jet stream shifts southward and a high-pressure Ridge returns to NC Brazil.
A warm blob of ocean water lies off the eastern coast of Brazil that will likely return warmer/drier weather conditions to NC Brazil during March. This would be important for the Brazilian winter corn crop which would be in the vegetative stage of growth. This is something to closely monitor.
** South American Weather Forecast Favorable Next 10-12 Days: A Shift in 11-15 Day Period?;
** AgResource Market Comment: It’s a week of political uncertainty with the US and China in critical trade negotiations. Even if the negotiations extend past the 90-day agreed timeframe (March 2nd) due to the complexity of IP protection/adherence, ARC would expect that the USTR would demand that China secure additional US ag goods (something other than soybeans) so that President Trump does not raise tariffs from 10% to 25%. Our view is than any early week weakness in corn/wheat should be a buying opportunity. Soybeans look to stay range bound until Brazilian fob premiums decline amid their expanding harvest.
** Snows Expand across the West and East over the next 10 days. Plains largely barren!
** More Excessive Rain for the S Midwest and Delta in the next 10 Days:
** Arctic Cold Shifts Slowly East and South in next 10 Days; Pattern Overall Unchanged: