Developments within the Russia-Ukraine battle and expectations about Chinese import plans have performed a job within the grain markets. South American climate is one other wild card.
Weekend rains in Argentina had been fairly good. Argentina typically talking has been drought-stricken,” mentioned Joe Vaclavik of Standard Grain.
After some rains early the week of Jan. 30, forecasters count on a dry interval to return.
“I’m unsure if Argentina is the rationale the bean market is up,” he mentioned. “But the forecast seems higher. The Brazilian soybean harvest is transferring slowly.”
One grains report indicated that solely 4.4% of the Brazilian crop was harvested as of Jan. 27 on account of extreme rainfall. That was lower than half of the 11.4% report on the identical level final 12 months.
One group mentioned 4.4% harvested by Friday, 11.4% final 12 months. Brazil’s forecast remains to be moist.
U.S. exports had been improved with optimism that China’s return from the Lunar New Year celebrations will improve the gross sales tempo, mentioned Jody Lawrence of Strategic Trading Advisors.
“Selling rallies, particularly in new crop, stays my focus, however with extra navy help being delivered to Ukraine and tensions rising, a Russian response that threatens the Black Sea export hall may very well be one other bullish spark,” Lawrence mentioned. “In brief, I’m involved about new crop costs holding up with higher South American climate whereas previous crop may get attention-grabbing for brief bursts.”
Jacob Christy of The Andersons mentioned that merchants are in anticipation of Chinese exercise within the grains markets, particularly with soybeans.
“Trade sees the current uptick in export demand coupled with hope that when China returns from its lunar vacation that they too will likely be a giant purchaser,” he mentioned. “With an already tight stability sheet and lingering questions in Argentina, the bean market is snapping again from final week. Obviously, we’ll wait and see on China demand. For now, rhetoric will chase value motion.”