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We kick off the week with Fed Bowman Speech at 8:20 A.M., Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Fed Kashkari Speech at 12:00 P.M., and Monthly Budget Statement at 1:00 P.M.

The Commitment of Traders report confirmed another week of selling in CBPT grain markets. Funds sold 17,600 contracts of corn, 22,000 contracts of soybeans, and 126,000 contracts across all 3 wheat exchanges. Typically, funds are net long in early February, with only modest short positions held in a handful of years. Record large net short positions are currently held in all 3 markets, which are 2-3 times larger than previous records. The markets await a fundamental trigger for funds to cover their massive short positions and give producers a chance at better sales. CBOT grain values are mixed with corn/soybeans higher and Chicago wheat lower. SE Asia is closed for the Lunar New Year while South America celebrates Carnival. Both holidays will diminish volume along with Super Bowl casualties this Monday.

US equity futures pushed to new records late last week and are little changed this morning. Tomorrow’s US inflation report is the key event of the week for the financial markets. Ag Resources (ARC) pegs US January inflation to fall 2.8-2.9%, the first reading below 3% since March 2021. The US CPI decline will be seen as pressuring the  US dollar on future rate cuts. However, it’s not expected that the January US inflation rate will change the US’s Central Bank narrative that they want to make sure that inflation is beat before adjusting rates downwards later this year.

The USDA’s 100^th Outlook Forum starts Thursday, and initial WASDE balance sheets will be released for 2024/25 crop year on Friday. ARC expects that WASDE  will adjust 2024 corn seedings lower while raising soybean and cotton acres. They also expect 2024/25 US corn/soybean end stocks will grow with trend yields. Corn stocks are expected to rise to 2,500-2,700 Mil Bu with soybeans at 360-400 Mil Bu. Such stocks are above the current crop year and lean bearish to the grain markets.

South American weather watch has rain falling across Central and Northern Argentina providing relief following weeks of extreme heat and dryness. Argentina rains started last week and continued daily. Argentine soil moisture levels are increasing while temperatures have moderated. Moderating temperatures are seasonal for mid-February. Brazil temperatures range from the 80’ to the mid 90’s with no extreme heat in the forecast at the moment which will benefit crop yields.

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