Argentine Rains Stifle Buying Interest

Rain finally came to Argentina, and two more waves are expected this week, stifling buying interest in soybeans and soymeal, analysts said.  Grains and soyoil are mixed in overnight trading.\r\n   Brazil’s weather forecasts fall into normal ranges of rain and temperatures, and strong South American crops continue to worry US traders because of the possibility of order cancellations by China.  This hasn’t happened yet, and AgResource reports continued strong demand for US soybeans inside China.  Still, with the Brazilian crop being harvested now, the chances of cancellations rise each day.\r\n   However, an advancing front of arctic air is worrisome to traders of US winter wheat.\r\n   Forecasts call for below-zero temperatures in parts of the Plains and the eastern US as the cold front sweeps through.  The northern Midwest and Northeastern US could see heavy snow that will restrict travel and interfere with restaurant traffic.\r\n   Much of the winter wheat in the US has been uncovered by the January Thaw, especially in the Plains, leaving it vulnerable to the arctic blast, analysts said.   The problem is there is no way to tell until the crop begins to break dormancy in late February.\r\n   Exports remain good, but with the US Dollar Index rising as the economy improves, there may come some limits to exports, if it continues.  However, a story on highlights that the Dollar Index’s failure to push above interim resistance, and a bearish relative-strength index favors the downside, which would help exports.\r\n   But beyond the technicals, the 2014 World Economic Forum in Davos, Switzerland, may sway market sentiment as global policy makers speak, the story said.  Comments could undermine the fundamental outlook for the world economy and favor a risk-off sentiment amid thoughts of another $10 billion reduction in the US Federal Reserve’s bond-buying program.\r\n   China reported over the weekend that it intends to end its stockpiling program for soybeans, essentially ending its program of price supports, and China’s soybean futures were down in overnight trading, according to ADMIS.  Instead of a stockpiling program, China will offer direct subsidies to farmers.  It will continue to stockpile corn and wheat.\r\n   However, China’s announcement was somewhat confusing to traders.  Instead of just dumping the stockpiling program with its guaranteed minimum price and resorting to direct payments, the government will retain some price controls, gradually building a system of target prices for agricultural products, according to  \r\n   Talk that China is seeking wheat to take advantage of low world prices is helping to support wheat markets a little overnight, said.  Some middle-eastern countries also are tendering for wheat, but world supplies are so large that even the extra buying interest likely won’t be enough to bring about a long-term bullish market.\r\n   No cash cattle trading was reported Monday, and there were no bids or offers to report.  Beef prices remain exceptionally strong, with surveys showing consumers say they are willing to pay more for beef and chicken.  Not so much with pork.\r\n   The USDA reported unusually strong boxed-beef wholesale price gains Monday amid moderate demand and light offerings.  The choice cutout was up $4.85 per cwt to $236.56, while the select cutout was up $5.13 at $234.45.  The choice/select spread narrowed to $2.11, and there were only 82 loads of fabricated cuts sold into the spot market.\r\n   The CME Feeder Cattle Index for the seven days ending Thursday was $171.32 per cwt, down $0.02 for the day.  By contrast, the Jan futures contract settled Friday at $170.00, up $0.20.\r\n