Afternoon wheat: The wheat complex rebounds from a defensive overnight
<div class=\"default-font-wrapper\" style=\"line-height: 1;font-size: 12pt; font-family: Verdana, Geneva, sans-serif;\"><p id=\"isPasted\" style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Futures:</span></u></em></strong></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The grain markets were under pressure through the night following the Trump administration’s decision to go ahead with placing a 25% tariff on imports from both Mexico and Canada, as well as an additional 10% tariff on goods from China, starting Tuesday. Not only are the tariffs leverage to force changes in border security and drug enforcement, but the Trump team is also insisting on addressing the trade deficit and imbalance the US has with Mexico. This morning, Mexico’s President Sheinbaum and US President Trump had a long conversation, covering subjects of mutual interest, and while the two did not see eye to eye on all subjects, Trump agreed to immediately pause the tariffs on Mexico for one month, adding that negotiations will be headed by Rubio, Bessent, Lutnick and Mexican officials, and that Trump looked forward to also participating with negotiations with President Sheinbaum’s team in an effort to achieve a deal between both countries. Following the announcement of the pause on the Mexican tariffs, the grain markets raced higher, with corn rallying 15 cents, wheat rallying almost twenty cents, and soybeans rallying 25 cents. The unknowns with tariffs are numerous, and looking ahead, we should anticipate plenty more twists and turns.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Chicago March wheat started the night nine lower, but much of the trade throughout the evening stayed within a range of between four and seven lower. The market firmed into the morning pause and quickly extended its rally once the day session started. The rally peaked at more than 14 cents higher mid-morning before retreating a nickel during the latter half of the day and ultimately finishing seven cents off its highs. </span><span style=\'font-family:\"Arial\",sans-serif;\'>March KC wheat started the night seven lower, with much of the price action throughout the night staying between three and seven lower. The market firmed into the morning pause and quickly extended its rally once the day session started. The rally peaked at more than eleven cents higher mid-morning before retreating a nickel during the latter half of the day and ultimately finishing five cents off its highs.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'><span style=\"text-decoration:none;\"> </span></span></u></em></strong></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Headline news:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Wheat shipments came in at 252,637 mt (9.283 mil bu) vs last weeks adjusted 484,544 mt and 295,540 mt this time last year. Marketing year-to-date shipments (through Jan 30) stand at 14.028 MMT (515.424 mil bu) vs 11.303 MMT (415.307 mil bu) this time last year. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>IKAR said Russian wheat prices for 12.5 pro wheat for LH Feb delivery rose a couple dollars week over week to $239.00/mt FOB. Prices for FH March delivery rose more than six dollars week over week to $243.00/mt FOB. The group added, the market is growing, but liquidity is shrinking, with competition from Argentina and Australia also remaining an issue. The group projects wheat exports in January were 2.5 MMT, which compares to 3.8 MMT in Dec and they project March wheat exports of between 2.2 and 2.4 MMT. </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>SovEcon had prices for the same class of wheat up slightly week over week, coming in at between $237 and $239/mt FOB compared to between $235 and $238/mt FOB the week prior. They added a very low export quota of 10.6 MMT of wheat for the second half of the season (to June 30), will be applied to the Russian market. They estimated Russian wheat exports last week at 590 TMT, up slightly from the prior week’s 530 TMT. They raised their projection for wheat exports in January to 2.2 MMT, which compares to 3.6 MMT the year prior. The group added the weather forecast for Russia indicates above-normal temps across all regions next week. Sowing work in the European part of Russia this year may begin 5 to 7 days earlier than usual, in the first ten days of March.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Four analysts polled by Reuters said they have raised their Aussie wheat production forecasts by between 1 and 3 MMT once the full crop was in. Their estimates now range from between 32 and 35.5 MMT, up from their prior estimate of between 29 and 34.5 MMT in Nov, and they are all above the Australian govt's projection of 31.9 MMT issued in December.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>The European Commission kept their forecast for 24/25 EU wheat production at 111.9 MMT, unchanged from prior, left their forecast for wheat exports at 25.0 MMT, unchanged from prior, and kept their forecast for 24/25 EU wheat ending stocks at 9.4 MMT, unchanged from prior.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;\'><strong><em><u><span style=\'font-family:\"Arial\",sans-serif;color:red;\'>Export business around this week:</span></u></em></strong><span style=\"color:black;\"> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Bangladesh is in for milling wheat. They have several tenders still open. No purchase has been finalized and may take considerable time before purchases can be confirmed.</span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'> </span></p><p style=\'margin:0in;font-size:12pt;font-family:\"Times New Roman\",serif;text-align:justify;\'><span style=\'font-family:\"Arial\",sans-serif;\'>Feb 4 Jordan is back in seeking 120 TMT of opt origin milling wheat. </span></p></div>