Good morning friends
Corn (H17)  349’2   -1’0
Soybeans (F17) 1008’0  +2’4
Chi Wheat (H17)  401’4    -1’6
KC Wheat  (H17)  410’2   -2’2
Cotton (H17) 69.70  +.37

CBOT markets were quiet in the overnight, corn and wheat traded with little enthusiasm while new crop soybeans traded up a few pennies in an attempt to get back above 10.00. Cotton got off the mat somewhat with March making a run at 70 cents on the back of weak Chinese production talk.
The grain and oilseed markets are trading on fumes at this point in the year with little to move price other than rumor and innuendo.Weather is the main factor that is pushing prices, right now there is little worry in the trade.  A strong high pressure system will hold across E/NE Brazil in the coming days. Meteorologists are saying this could block moisture from the eastern part of Brazil’s growing region, while keeping rains in the south near the Arg/Brasil border. Short term all of this is seen as favorable, as the parched areas near the border will get plenty of moisture, but according to my weather guys, N/NE Brazil is more highly susceptible to drought longer term. The time to watch S American soil moisture more closely begins in early January. Normal/above normal temps (highs in the 80s, low 90s), and so regular rainfall is desired throughout the next 30 days. At this point it makes little sense to see any changes in yield forecasts, but that will change in the coming month.  Be ready! A corn market rally over the short run in this country hinges on problems in SAM.
November soybeans appear to be making a push toward the 100 day EMA near 9.83. US and Brazilian offers for shorter term product are pretty even, so I imagine the price has support from the commercial side.  From an open interest perspective, soybeans have seen significant covering in recent weeks as the long speculator moves toward the exits.  There is fuel for this market to move lower on spec liquidation.  Soybeans sit well off lows from last year record short position, so hedgers are still encouraged to get coverage if it makes sense from a profitability standpoint.  That said, I would not be chasing this selloff lower.  I look for a bounce as we get through a weak seasonal period that comes into play over the next month.  Weather will still dictate price and as I mentioned above, there is plenty to follow right now.
Wheat markets will follow corn and beans lower, amidst a record short position.  The newest piece of bearish news came from Egypt and their tender for wheat in recent days. Romanian/Russian wheat was purchased at $187 per ton, which is down a few dollars from recent purchases, but the Argentine wheat was bought at $173/MT, which is uber cheap. Algeria bought from Argentina last week, at below US offers as well. .US Gulf offers have fallen below Argentina now. The story in wheat will depend on what the global crop looks like this spring. The US is obviously not getting business in these conditions and need to drastically cut supply OR see competition markets cut supply.  Neither appears to be in the cards right now.  That said, the market remains record/insanely short. I wouldn’t be shocked to see some short covering in the weeks ahead.

Cotton is stuck between a bullish story out of China regarding production and a bearish story stateside regarding production.  The spec open interest remains really high even after the selloff we have seen in recent days.  Spread action is also weak with March giving gains back to Dec 17. Watch the close in March cotton today. If we would close above 70 cents, that would be a rejection of the 100 day EMA. At this moment I favor the short side of the trade due to the risk of spec liquidation.