Written Commentary
MORNING OUTLOOK
Grains are mixed. SK is up 6 cents and near 15.98. SMK is near 450.0. BOK is near 66.86. CK is unch and near 6.45. WK is up 5 cents and near 7.91. KWK is up 5 cents and near 8.17. MWK is up 5 cents and near 9.55.
US stocks are lower. US Dollar is higher. Crude is lower. Silver, sugar and cotton are higher. Copper is lower.
Dalian soybeans, soymeal. soyoil, palmoil and corn are higher. Argentina, S 1/3 of Brazil, most of Paraguay and US south plains forecast are mostly dry. East US HRW, E Midwest, Delta and SE could see strong storms. Lakes snow.
SH tested 15.99 overnight on more talk of lower SA crops and higher demand for US crush and exports. Some feel losses in SA could be 1,320-1,360 mil bu. Where does they market find that shortfall? What price will it take to slow demand? Rumors suggest China will sell 5 mmt of soybean from reserve or 2.5 weeks of demand. They could also sell 300 mt soyoil. Soybean have to be replaced in 120 days. There is also talk Paraguay may run out of soybean by mid-year and for the first time ever drop soybean import duties. IN soybean processing plant fire supportive to soymeal. Talk of higher US soyoil demand for biodiesel has some looking for soyoil to test all time high near 72 cents.
Corn futures are unchanged. Some feel losses in SA corn crop could be 900-990 mil bu. Ukraine also needs to export 670 mil bu of corn. Where does they market find that shortfall especially if Russia invades Ukraine? What price will it take to slow demand? Weekly US corn export sales are estimated near 500-1,000 mt. US and NATO report Russia may be increasing troops. There were reports of mortar fire by Ukraine forces in disputed Donbas state. CK traded over Wednesday high overnight but has since backed off to 6.45.
Wheat futures are marginally higher. Talk of Russia build-up of troops and mortar fire by Ukraine forces in disputed Donbas state offers support. Dry US south plains and N Africa is also supportive. Weekly US wheat export sales are estimated at only 75-500 mt. This offers resistance. Most estimate that to date, Russia wheat exports are 23 mmt with quota 30-33 mmt versus USDA 35 mmt. EU wheat export pace is closer to 30 mmt vs USDA 35. Ukraine is estimated near 24 mmt. Where does the market find that 10-15 mmt (370-550 mil bu) shortfall especially if Russia invades Ukraine? What price will it take to slow demand?
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