Written Commentary
MORNING OUTLOOK
Grains are mixed. SH is up 9 cents and near 15.37 (new highs). SMH is near 436.1 (new highs). BOH is near 66.40. CH is up 1 cent and near 6.36. WH is unch and near 7.68. KWH is up 1 cent and near 7.87. MWH is up 3 cents and near 9.18.
US stocks are higher. US Dollar is lower. Crude is higher. Gold, silver, copper, coffee and cotton ae higher.
Soybean futures traded higher on Tuesday on more talk of lower South America 2022 supplies which could increase demand for US soybean and soyoil. Range of trade estimates is from 125-138 vs USDA 139. This suggest total South America soybean losses could be 500-900 mil bu. Higher demand for US soybeans could drop US 2021/22 carryout below 200 mil bu. Argentina, S Brazil and Paraguay are dry. C/N Brazil rains are slowing harvest. Brazil January soybean exports record 2 mmt. Loadings record 10 mmt. Farmer not selling. China is on holiday but they did buy 132 mt US new crop soybeans on Tuesday. Malaysian palmoil futures are lower but market continues to watch new Indonesia policy of reducing exports.. US Dec soybean crush est at a record 197.7 mil bu.
Corn futures saw some new buying. There continues to be talk of lower 2022 South America crops. Some estimate losses to be near 20 mmt but USDA may only drop crop 5 mmt on Feb 9.
20 mmt loss could add 400 mil bu to US demand. Brazil 1st crop 20-25 mmt vs 29 expected. Brazil could run low on domestic supply before 2nd crop. US ethanol production up 13 pct yoy.
Wheat futures bulls need new news. Reduced tension between Russia and Ukraine and fact traders are short wheat vs long corn and soybeans weighs on wheat futures. Matif futures are higher on drop in EU and Russia supplies for export. Talk of La Nina through summer could limit US 2022 HRW rainfall.
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