What Traders are Talking About:
Overnight highlights: As of 6:00 a.m. CT, corn futures are trading 1 to 2 cents lower, soybeans are 10 to 16 cents lower and wheat futures are fractionally to 2 cents higher. Beneficial rains and cooler temps in Argentina will keep soybeans and corn under pressure this morning. Cattle futures are expected to open firmer this morning, while hogs are called mixed.
* Beneficial rains for Argentina. Rains began falling on Buenos Aires last night and will move into Argentina's main grain/soy production areas by mid-week. Cooler temps will also be seen across Argentina the next several days. The rains and cooler temps will provide timely relief from heat and dryness that has persisted since December. The soybean crop will get the most benefit, but corn will also be helped, especially the portion of crop that is pollinating or about to pollinate. But warmer and drier weather is forecast to return once the front passes.
The long and short of it: Soybeans are under heavy pressure to start the week on pressure as crop stress in Argentina is about the only South American concern at this time.
* China ends soybean, cotton stockpiling. As expected, China will end its stockpiling program for soybeans and cotton in 2014 in favor of direct subsidies to farmers. The stockpiling program was not influencing more domestic production, so the Chinese government is switching to a more market-oriented system in hopes of better results. The Chinese government will continue to stockpile corn, sugar and rapeseed. Meanwhile, China's vice premier says the government will increase subsidies to support agriculture production growth. Based on his comments, much of the increased spending on agriculture will go toward water conservation and technology improvements needed to sustain and growth agricultural production.
The long and short of it: Even with a farmer subsidy program, China will still rely on imports to fill much of its soybean and cotton needs as the country focuses on trying to be as self-sufficient as possible on its staple grains of corn, wheat and rice.
* China's Q4 GDP dips, but not as much as expected. China's economy grew at a 7.7% clip over year-ago in the fourth quarter of 2013, which was down from 7.8% growth in the third quarter, but slightly better than expected. For all of last year, China's GDP came in 7.7% above 2012, which was the slowest growth rate for the country in 14 years. Meanwhile, December industrial growth was slower than expected at 9.7% above year-ago.
The long and short of it: China's economy may get a boost in the first quarter from the widespread Lunar New Year celebration, which starts at the end of the month. But there are growing concerns about how the building bird flu situation in the country may impact those celebrations.
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