Written Commentary
Morning Outlook
Grains are higher. SX up 5 cents and near 10.38. SMZ is near 355.5. BOZ is near 33.55. CZ is up 1 cents and near 3.90. WZ is up 7 cents and near 6.01. KWZ is up 6 cents and near 5.36. USDA is back in business today with any export sales flashes, weekly grain inspections and crop progress. US stocks are mixed to lower. Crude is higher. US Dollar is mixed to higher.
Chinese Ag futures (January) settled down 11 yuan in soybeans, up 7 in Corn, down 33 in Soymeal, down 10 in Soyoil, and up 2 in Palm Oil. Malaysian palm oil prices were up 14 ringgit at 3,008 (basis December) with ongoing ideas of tightening supplies supporting prices.
The Southern Plains over the 6 to 10 day period remains with little rainfall with temps beginning to fall below average.
The Brazilian growing regions has hit and miss rainfall central/north with moderate amounts covering 70% of the region. Rains central/south are lighter in amounts with 70% coverage. Rains continue central/north in the 6 to 10 day period. The Argentine growing regions has a forecast over the next 6 to 10 days of moderate rainfall covering 90% of the growing areas.
The models are still suggesting the potential for rain is rising for some of eastern Ukraine, Russia’s Southern Region and Kazakhstan during the coming two weeks, although the precipitation is advertised to be sporadic and light. A general soaking is not very likely and confidence getting such a soaking is low, but a few showers are possible.
SX, CZ and WZ continue to dance arounds 10.50, 4.00 and 6.00 respectively. Managed funds are long. Tighter US corn and soybean balance sheets plus weather concerns in Russia, Argentina and US south plains is supportive. Need additional bullish either supply of demand news to push above these historically key prices. Some feel that US soybean outlook has tightened enough that US farmers will need to harvest 90 million acres in 2021 and a yield near 50 bpa to satisfy demand and loosen the balance sheet.
On Monday, funds were net even in SRW Wheat; net sold 27,000 Corn; net sold 30,000 Soybeans; sold 9,000 Soymeal, and; net sold 7,000 Soyoil. We estimate Managed Money net long 29,000 contracts of SRW Wheat; long 157,000 Corn; net long 228,000 Soybeans; net long 76,000 lots of Soymeal, and; long 81,000 Soyoil.
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