Written Commentary
SOYBEANS
Soybean traded lower on talk that Argentina would get needed rains early next week and that lower Brazil export prices suggest a large crop and could lead to Brazil imports to US. Fact USDA did not lower South America crops, raise US exports, lower US carryout and raise China imports on yesterday’s report also triggered long liquidation. Most analyst estimate US 2020/21 soybean carryout closer to 100 mil bu vs USDA 120. Same group estimates US 2021 soybean crop near 4,550 mil bu and carryout close to 100 mil bu. This is “not” bearish. Some feel 14.00 and 400 dollar soymeal futures are close to value. Still there may not be a lot of bullish news from here until USDA March 31 report. Some look for US March 1 soybean stocks near 1,500 mil bu vs 2,255 last year.
CORN
Corn futures traded lower. Fact USDA did not raise US corn exports and lower US 2020/21 carryout on yesterday’s report weighed on prices. Some feel that South America corn crop could be 3-6 mmt below USDA guess. Delays in plantings due to wet weather and dry conditions in S Brazil could also lower Brazil final corn crop and exports. A lower Argentina crop could also reduce the window where Argentina corn price are lower than US and compete for US exports. Weekly US corn export sales are est near 400-750 mt versus 115 last week Weekly US ethanol production was up 10 pct from last week but still down 10 pct from last year. Stocks were down 1 pct from last week and9 pct from last year. Margins are improving. This could increase processors demand for corn. Dalian corn futures dropped 15 cents to near 10.77. USDA estimates US 2020/21 corn carryout at 1,502 mil bu. Most private estimates are near 1,100 mil bu. Difference is exports. Same groups est US 2021 corn crop near 15,250 mil bu and 2021/22 carryout near 1,100. If true that is “not” bearish. Some feel CK support is near 5.30-5.35. Still there may not be a lot of bullish information between now and USDA March 31 report. Most look for US March 1 corn stocks near 7,780 mil bu vs 7,951 last year.
WHEAT
Wheat futures traded lower. Fact USDA made few changes to US 2020/21 Wheat supply and demand offered resistance to futures. USDA did lower HRW exports 20 mil bu and raised white the same. USDA did drop World Wheat stocks 5 mmt due to higher China feed demand. Trade was looking for USDA to lower their estimate of EU and Russia exports. EU due to declining supply and Russia due to higher export taxes. US south plains forecast calls for some rains esp in east areas. US HRW crop is emerging from dormancy and for now looks ok and may have survived the record cold temps. Drop in La Nina could suggest more favorable April and May US Midwest and south plains weather. Weekly US wheat export sales are estimated near 150-350 mt versus 219 last week. Matif and Black Sea wheat futures traded lower. USDA estimates US 2020/21 wheat carryout at 836 mil bu. Most private groups est US 2021 wheat crop near 1,832 mil bu and 2021/22 carryout near 705. Some feel WK support is near 6.00-6.10. US millers have good wheat ownership into June. Barkers have less coverage but current prices could trigger new buying.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
