• Will Thursday's markets be driven by more trade war moves or talk of invading a new area of the world coming from the US White House. Grab your popcorn. 

• Overnight saw a number of markets reverse course from Wednesday's close, most notably the US dollar seeing renewed buying interest. 

• The Grains sector was higher across the board though trade volume was down from what has been registered overnight so far this week. 

Morning Summary: What will the US administration say today? That is the question. As we’ve watched play out over the past few weeks, markets continue to come unhinged at whatever the latest statement from the White House is on a nearly daily basis, ramping up the volatility across the board. Will it be tariffs against trade friends and foes alike are back on? The announcements of retaliation from those same friends and foes? Or has the administration put another region of the world on the list “To Be Invaded”? So far, according to my faulty memory, this list includes Mexico, Canada, Panama, Greenland, and the Gaza Strip, though I may have forgotten one or two along the way. Vlad must be so proud. As for markets, something seems to be brewing early this Turnaround Thursday. (Yes, a Turnaround rather than the classic Throwaway. I think we can do away with the idea there will be dull days for the foreseeable future.) WTI crude oil is in the green, to go along with the stronger US dollar index ($DXY) and weaker gold and silver markets. It’s interesting to note March silver is being hit the hardest, down as much as 65.0 cents (2.0%) through pre-dawn hours. 

Corn: The corn market was higher early Thursday morning, though overnight trade volume was lighter than it has been for a while. March (ZCH25) rallied as much as 2.25 cents and was sitting on its session high at this writing, while registering 17,000 contracts changing hands. With the Goldman Roll set to begin Friday, meaning long March futures could be sold and May issues bought, the March-May futures spread could take out its series of lifetime low daily closes at 11.5 cents carry. If this occurs, then a fundamental asterisk would be placed on the bearish technical pattern given pressure most likely isn’t coming from commercial traders. As for national average basis, the National Corn Index was calculated at $4.6075 Wednesday evening, down 1.0 cent from Tuesday and putting my basis calculations at 32.5 cents under March and 44.0 cents under May futures. Last Friday’s figures were 32.25 cents under and 43.25 cents under respectively. Looking ahead at Thursday, we’ll get the latest round of weekly export sales and shipments numbers, with the key being sales to some of the US’ main trading partners in this time of uncertainty. Yes, business with Mexico will be in the spotlight. 

Soybeans: The soybean market saw some Turnaround activity from Wednesday with the March issue (ZSH25) rallying as much as 8.0 cents overnight and also sitting on its session high as of this writing. Trade volume was moderate at best, sitting at 18,000 contracts pre-dawn. It’s interesting to note the May issue was up 8.5 cents while July had added 8.75 cents, both on decent trade volume as well, indicating most of the support came from the noncommercial side. Some commercial interest could also be hidden in there somewhere. I’m not expecting an announced sale later this morning, but anything is possible. As for the weekly sales and shipments update, it will not be surprising if the numbers are down a bit given the world’s largest buyer was in the early stages of its weeklong Lunar New Year holiday as of last Thursday. Since then, the US has seen announcements of retaliatory tariffs from China, or in other words, the same tiresome trade war game as before. Wednesday evening saw the National Soybean Index priced at $9.93, down 18.0 cents from Tuesday leaving national average basis at 64.0 cents under the March futures contract and weakening to 79.25 cents under May. 

Wheat: The wheat sub-sector was back in the green early Thursday morning, continuing the yo-yo like activity seen so far this week. The bottom line is the structure of the three wheat markets has not changed: Both winter markets remain fundamentally neutral-to-bearish while spring wheat is neutral-to-bullish. Meanwhile, Watson has been covering some of its large net-short futures position across the board. For now, I’m more interested in the latter meaning I’m patiently awaiting the next CFTC Commitments of Traders report (legacy, futures only) set for release Friday afternoon. For the record, as of a week ago Tuesday funds held net-short futures positions of 91,110 contracts (SRW), 24,150 contracts (HRW), and 18,780 contracts (HRS). Additionally, the SRW short futures position was at a record large 225,000 contracts while the HRS short futures position was still within sight of its all-time high at 44,700 from 2 weeks prior. We could talk export sales and shipments, weather, and other fundamentals, but the key to the wheat markets at this time is how overloaded the short side seemingly grew. Speaking of weather and fundamentals, though, the new-crop HRW July-September futures spread closed Wednesday at a carry of 12.5 cents and covered a bearish 75% calculated full commercial carry.