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The grain and soy markets look nearly as grey as the skies do here in Northern Illinois this morning. While not overtly threatening, but rather gloomy. I read that there was a little rain that fell in Argentina over the weekend but from the sounds of it, amounts were rather minuscule. Akin to the old saying that it amounted to a fly taking a leak in the ocean. I suspect the pressure is as much about a lack of ag-specific news and a negative pull from the Marcos. Metals and energies are weak while equities and the dollar are tracking higher. A quick comment on the dollar. While it has not really been able to rally as of yet, do note that since reaching the major 50% retracement of 88.34 back in late January, it has been developing a base between there and 90.50 and while indicators have not turned higher, it is looking more and more as if we are setting up for a rebound. If that turns out to be the case, it would produce headwinds for rallies at least until we can develop or potentially develop weather issues this summer.
Last Friday AgRural reported that the bean harvest in Brazil has now reached 48% complete which behind last year at this time of 56% but still 2% ahead of the 5-year average. Corn harvest was estimated to be 28% complete, which is behind both last year and the 5-year average which are 36% and 37% respectively. One interesting note from that country is that evidently, farmers are clinging tightly to existing corn inventories as JBS was forced to import 30k MT from Argentina. That was the first time in a year that this has occurred.
Managed money has continued to buy across the grain and soy markets. The CFTC reported that last week they purchased around 107k contracts of corn and are now long around 200k, 32k beans bringing them to 149k long and 28k wheat, which reduces the short position to around 43k.
While it did not appear to lift spirits much, the USDA did announce decent sales this morning in corn. 107,752 MT were sold to Japan for this marketing year and 254,800 MT to unknown.
Many people assumed that when President Trump pulled dashed the TPP agreement once he took office that the deal was dead, but it turns out that is not the case. 11 other nations have forged ahead and late last week signed an agreement. It is now called The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). There is nothing to say that the United States could not eventually negotiate its way back into this agreement but recent moves, i.e., tariffs, appear to be more inward-looking than outward.
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