Thursday, January 4, 2018

Financials: Stocks are up and the DJIA is within a few pts of 25k. Yesterday, the S&P 500 passed 2,700. ADP’s private sector survey for Dec came in at 250k vs. estimates of 190k and 185k in Nov. The feud between Bannon & President Trump continues to escalate. President Trump’s lawyer issued a ‘cease and desist’ letter that accused Bannon of violating an agreement signed in 2016 that prevented him from disclosing confidential information or disparaging Trump and his family. Worth noting that several individuals are refuting statements made in the book. Specifically, Gary Cohn is reportedly reaching out to a lawyer about the contents of the book. A Chinese minister said yesterday that Pakistan has “made great efforts and sacrifices for combating terrorism” and urged the international community to recognize this. Pakistan’s central bank said they will be replacing the dollar with the yuan for bilateral trade and investment with China. A fellow at the Brookings Institute noted China has promised Pakistan $57B in investments on infrastructure & energy under its Belt & Road Initiative. Chinese authorities issued new guidelines for bond trading with a focus on restricting leverage and deals that skirt regulations. AT&T said it will launch 5G service in a dozen cities by the end of this year. Reuters is reporting that Spotify privately filed for an IPO with a goal of listing in Q1 or Q2. Merrill Lynch has banned its clients and financial advisers who trade on its behalf from trading bitcoin. Russia and Venezuelan officials are working on state-sponsored cryptocurrencies.

Corn: Overnight volume 14k and OI +7k. Argentine forecast remains the same, dry short-term and then rains in the 6 - 15 day. River dealing with ice issues and IL River pretty much shut down. PNW bids continue to firm, following cars higher. EIA out at 10:00 AM, seasonally stocks tend to build in Jan but mkt hoping run rates have slowed a touch.

Beans: Slow overnight trade of 15k. No changes in Argentine weather, hot/dry in short term and more confidence for rains in 6 - 10 day. OI was steady, so maybe the New Year money flow isn't a big deal? And the beat goes on…China bought a few more F/M cargoes from Brazil. Palm oil down .9%, gov't expected to drop 5% export tax for JFM. The REAL is unchd at 3.246. Cash markets all about logistics and cold weather problems. Expect to see gulf/STL bids firm.

Wheat: Futures were down 2-3cts overnight. A few notes from a colleague driving around NC KS yesterday. Little to no snow cover, cold temps have burned back some vegetation, but stands are actually really good if you get down close. Algeria is pending for Mar shipment. They’re expected to take French and possibly a few Argie cargoes. Rosario updated their balance sheets yesterday. They pegged new crop at 17.3mmt vs. USDA at 17.5mmt. Exports were 12.8 for 16/17 and 10.7mmt for 17/18, both ~1mmt less than USDA.

T-Storm: Despite some t-storms in southern areas tonight-tomorrow, more rain will be needed in Argentina. At least some t-storms follow some heat from late next week fwd, but coverage and totals will take days to determine with ~1” most likely. S Brazil (and Paraguay) was wet in recent weeks, while northern areas were fairly dry, but t-storms focus on driest northern areas over the next 5-days, then return to southern areas in 10-days.