Tuesday February 12th, 2019

Financials: Stocks are up and the dollar is dn 100pts. Crude jumped $1.25 after OPEC said its production fell by 800k bbl/day in Jan. Saudi Arabia also pledged to cut at least 500k bbl/day which is more than initially planned. OPEC also lowered its forecast for oil demand as it sees economies slowing and competition from its rivals. Congress reached a tentative border deal that includes $1.375B for physical barriers. In exchange for funds, Democrats dropped their demand to limit the number of people who can be detained by ICE. Barring some unforeseen circumstance, Pelosi & McConnell have indicated they will put the bill on the floor. The President has yet to comment on it. There’s nothing new to report on the trade front other than President Trump “wants to meet with President Xi very soon” according to Kellyanne Conway. Fed Chairman Jerome Powell will be speaking today at a rural policy forum. Walmart and logistics firm Deliv have ended their partnership to offer same-day grocery delivery. A source told Reuters that drivers had to frequently wait 40 min or more to collect grocery orders when they showed up at stores because Walmart gave priority to in-store customers.

Corn: Overnight vol at 30k. Big jump in OI, +23k. CONAB came out with new their first estimate of Safrinha production using acreage for this year and was 65.198 MMT. Summer corn production 26.454 vs 27.455 LY due to slightly lower yield. Nov ethanol exports at 148mg, -17%. YTD exports at 1.56b/gal, +31%. South Korea bought 3 cargoes for early June arrival at $205-206 CNF. This will likely be sourced out of Argentina. The USDA flashed a sale of 122,376mt of corn to unknown for 18/19.

Beans: Deal or No Deal? Overnight vol at 20k. OI -5k. CONAB called Brazil crop 115.3mmt, -3.5mmt from LM and right in middle of most trade estimates. REAL +1%. China bought a few A/M cargoes from Brazil about 25c below US offers. Cash markets mostly quiet with inverted freight not a big issue yet for most as cash coverage is ample. 44 House members sent letter to leaders pushing for legislation that extends biodiesel tax credit. Advance Trading, Inc. c/o at 969mbu vs USDA at 910. 19/20 c/o is at 1.135bbu.

Wheat: Futures dn 1-2cts overnight. Algeria issued a tender that will close on valentine’s day. KC spreads continued to firm with KH/K into -4^4. This is keeping the WH/K near even money. Russia & Kazakhstan signed their supply agreements with Iran today.

Weather: Tstorm- Argentina has been wet for most of the growing season, but the coverage of 14-day dryness increased sharply in recent days, indicating rain will be needed later this month because little to none falls over the next 10 days. Frequent t-storms ease drought in Brazil over the next two weeks, improving soil moisture for second-crop corn, but likely arriving late for soybeans in the far north (MATOPIBA), while slowing harvesting central and south. In the U.S., some snow affects feedlots in / near Nebraska Fri.-Sat., followed by better chances for snow in a colder period next week, but a major winter storm is not currently likely in the central and southern Plains.