Written Commentary
Soybeans, soymeal and corn traded higher. Soyoil and wheat traded lower. US stocks were lower. Crude was higher. US Dollar was higher. Gold and copper were lower. Index funds start rebalancing today and for next 4 days. Index funds annually move money form big gainers to big losers. This could explain todays losses in metals, Bonds and gains in US Dollar.
SOYBEANS
Soybeans ended higher on talk of increase China demand for US soybeans and a drier Argentina forecast. There are also some that feel next weeks USDA report could be friendly soybeans. Some feel a friendly report could push nearby soybean futures to 14.50-15.00. USDA announced 204 mt US soybean to China. Sep-Dec US exported a record 40.5 mmt soybeans vs 22.3 ly. China was a record importer at 35.0 mmt versus 30.7 last year. Some now feel China will buy 40 mmt US soybeans in 2020/21. China Dalian soybean, soymeal and canola oil prices are making new contract highs. Argentina lowered their soybean crop rating to 27 pct G/E from 42 last week and 52 ly. Soils are 51 pct adequate vs 71 last week and 94 last year. Average trade estimate for US 2020/21 soybean carryout near 139 mil bu vs USDA 175. Dec 1 US soybean stocks could be near 2,920 mil bu vs 3,252 last year. Average trade estimate for Brazil+Argentina soybean crop near 179 mmt versus USDA 183.
CORN
Corn future managed small gains and ended near 5.00 CH. US cash domestic basis remain firm on lack of new farmer selling. US corn export prices are cheapest in World. Some feel that China 2020 corn crop was lower than USDA estimate and that they will buy as much as 20 mmt US corn in 2020/21 and 40 mmt in 2021/22. China Dalian corn futures continue to make new highs daily and is near 11.10. Some feel next weeks USDA report could be friendly corn. Some feel a friendly report could send CH to 5.25-5.50. Average trade estimate for US 2020/21 corn carryout near 1,599 mil bu vs USDA 1,702. Dec 1 US corn stocks could be near 11,951 mil bu vs 11,327 last year. Average trade estimate for Brazil and Argentina corn crop near 155 mmt versus USDA 159. Some feel final South America corn crop could be 10-15 mmt below USDA last guess. Argentina corn crop is rated 12 pct good/ex vs 55 last year. 29 pct of the crop is pollinated vs 43 last year. Soils are 51 percent adequate versus 71 last week and 94 last year.
WHEAT
Wheat futures traded mixed. WH and KWH traded lower. MWH traded higher. Lack of new bullish news limited the upside in Wheat. Some feel uncertainty over Russia and EU wheat exports and broadening dry soils across US south plains limits the downside in prices. Higher EU and Russia wheat prices is making US Wheat export prices more competitive. There are no Russia Wheat export prices mid Feb forward. Some doubt Russia will export the 40 mmt of exports estimated by USDA. EU export pace suggest exports near 32 mmt versus USDA est of 26. Some feel EU will have to slow export pace to preserve supplies for domestic use. Argentina is expected to export 12.5 mmt of at 18.0 crop. Today, Argentina lowered to crop to 17mmt. There is talk Argentina could suspend new wheat exports. Average trade estimate for US Dec 1 wheat stocks is near 1,695 mil bu vs 1,841 last year. Average trade estimate for US 2021 winter wheat acres near 31.5 mil vs 30.4 ly.
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