Written Commentary
Grains Outlook
Grains are mixed. SX up 3 cents and near 10.47. SMZ is near 358.4. BOZ is near 33.53. CZ is down 1 cent and near 3.90. WZ is down 1 cent and near 5.92. KWZ is down 1 cent and near 5.29. Trade awaits any new news on new US soybean and corn export sales to China. US stocks are higher. Crude is unchanged. US Dollar is mixed to higher. US Bank earnings are better than expected but they warn of a slower US economic outlook.
Chinese Ag futures (January) settled down 2 yuan in soybeans, up 19 in Corn, down 10 in Soymeal, down 10 in Soyoil, and up 8 in Palm Oil. China’s corn futures hit a new record high on Wednesday as investors bet on higher prices for the grain because of crop damage from typhoons this year and due to Beijing’s efforts in years past to whittle down its once-mammoth state reserves; delivery in January hit 2,566 yuan ($380.70) per ton, the highest on record. Malaysian palm oil prices were down 9 ringgit at 2,994 (basis December) at midsession on position-evening.
The US Southern Plains over the 6 to 10 day period has the models mixed with the GFS showing little to no rainfall while. The European has an increase of precip for the region.
The Brazilian growing regions over the 6 to 10 day period has widespread rains with 80% coverage. The Argentine growing regions over the 6 to 10 day period has moderate rainfall over 90% of the region.
USDA estimated that 41 pct of the US 2020 corn crop is harvested versus 25 last week and 20 last year. IA is 42. IL is 45. USDA rated the crop 61 pct good/ex versus 62 last week. KY is 90 pct good/ex, MN 81, WI 79, SD 78 and MO 78. IL IS 66, IA is 44, MI 51 and OH 48.
USDA estimated that 59 pct of the US 2020 soybean crop is harvested versus 38 last week and 23 last year. IA is 78. IL is 56. USDA rated the crop 63 pct good/ex versus 64 last week. MN is 79 pct good/ex, WI 81 and MO 72. AR is 69, IL IS 66, IA is 49, ND 37 and OH 52. USDA estimated that 68 pct of the US 2021 winter wheat crop is planted. 41 pct is emerged. KS is 74, MO is 26 and WA is 79.
Yesterday’s U.S. weekly export inspections had Wheat exports running 10% ahead of a year ago (10% last week) with the USDA currently forecasting a 1% increase on the year, Corn 72% ahead of a year ago (up 81% last week) with the USDA up 32% for the season and Soybeans are up 76% on the year (up 57% last week) with the USDA having a 26% increase forecasted on the year.
SX, CZ and WZ continue to dance arounds 10.50, 4.00 and 6.00 respectively. Managed funds are long. There are increase chance for rain in Brazil and Argentina. There is concern that late Brazil 2021 harvest could add to US soybean export demand. Argentina farmer is still a reluctant seller. There is also chances of rain in parts of Russia but Russia farmer is also as slow seller. Russian domestic wheat prices remain at all time highs. There is no rain forecasted for US south plains. Ukraine corn export basis is +145CZ versus +25/30 a year ago.
On Tuesday, funds were net even in SRW Wheat; net bought 7,000 Corn; bought 8,000 Soybeans; bought 2,000 Soymeal, and; net bought 3,000 Soyoil. We estimate Managed Money net long 29,000 contracts of SRW Wheat; long 164,000 Corn; net long 236,000 Soybeans; net long 78,000 lots of Soymeal, and; long 84,000 Soyoil. Preliminary Open Interest saw SRW Wheat futures down roughly 400 contracts; HRW Wheat down 1,000; Corn up 6,800; Soybeans up 11,500 contracts; Soymeal up 1,900 lots, and; Soyoil up 4,600.
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