Written Commentary
Soybeans, soymeal, soyoil, corn and wheat traded higher. US stocks were higher. US Dollar was lower. Crude was lower. Gold was lower. Meats were lower.
SOYBEANS
Soybeans traded higher. After this week’s USDA numbers and following sharp rally in prices funds reduced their net longs. Lack of new news about new China buying and increase US farmer selling weighed on prices. Record weekly US soybean exports last week and good weekly US export sales offered support. Fact USDA dropped US 2020 soybean crop and lowered US 2020/21 carryout will eventually push futures higher. Ongoing dry weather pattern across south Brazil and east Argentina is also supportive. Argentina soybean crop is 20 pct planted versus 24 average. Argentina estimates their soybean crop at 46.5 mmt versus USDA 51.0. Weekly US soybean export sales were near 1,468 mt. US soybean export commit is near 49.9 mmt versus 22.1 last year. China is 27.5 with 10.5 in unknown. USDA estimates US soybean exports near 59.8 versus 45.6 last year. Some feel US exports could be near 64.0 mmt. FACE (Informa) estimated US 2021 soybean acres at 89.1 million versus 83.1 this year. This is down 100,000 acres from their October guess. Their 2021 soybean crop is near 4,587 mil bu. USDA baseline guess was 4,465. If carryin is 140 and total demand is 4,500, carryout would be 242. Many still feel soybean futures need to trade over 12.00. SX21 gained today on need for US farmers to add 2021 acres.
CORN
Corn futures traded slightly higher. Fact USDA dropped US 2020 corn crop and 2020/21 US corn carryout more than expected helped CZ test 4.28. Increase US farmer selling helped trigger some technical long liquidation. Today was the first day in which CZ21 and SX21 showed signs of fighting for increase US 2021 acres. Food and Ag Commodity Economics (Informa) estimated US 2021 corn acres at 91.7 million versus 91.0 this year. This is down 230,000 acres from their October guess. Their 2021 corn Yield is near 181.0 versus this year’s 175.8. This would produce a crop near 15,270 mil bu. USDA baseline guess was 14,890. If carryin is 1,625 and total demand is 15,150, carryout would be still historically low at 1,770. This suggest South America, Ukraine and US will have to have good 2021 crops/weather or corn futures will trade higher. Weekly US corn exports sales were near 978 mt. US corn export commit is near 34.1 mmt versus 12.4 last year. Mexico was the best buyer. China is 10.7 with 5.4 in unknown. USDA estimates US corn exports near 67.3 versus 45.1 last year. There is talk that China corn users are asking for US 2021 corn prices. Most feel China will import 22-25 mmt of corn versus USDA guess of 13. There was talk that France may have bot a cargo of US lakes corn. This despite paying the 25 pct import tax. Some feel France may be testing the government and if they will impose the tax.
WHEAT
Wheat futures managed to trade higher. Fact USDA continued to estimate World wheat end stocks record high weighed on futures. World wheat prices followed lower US futures. Still, dry weather across US south plains. Argentina and Black Sea limits the down side in futures. USDA failed to lower Russia 2021 wheat crop enough to trigger new buying. Fact they are showing big gain in Europe 2021 crop masks the fact that their old crop supplies will be tight especially if they have to increase wheat feeding. USDA failed to increase World wheat feeding in their November guess. Weekly US wheat export sales were near 300 mt. US wheat export commit is near 17.0 mmt versus 15.1 last year. USDA estimates US wheat exports near 26.5 versus 26.2 last year. This week spread between US HRW export prices and French and Russia prices narrowed. US is now just $2 below French and $5 below Russia. Russia domestic prices are still at all-time highs. This week’s Russia export quota was higher than expected and weighed on prices. FACE (Informa) estimated US 2021 wheat acres at 46.0 million versus 44.3 this year. This would produce a crop near 1,934mil bu versus 1,826 in 2020. 2021 US winter wheat acres were estimated near 31.5 versus 30.4 ly. HRW 21.9 vs 21.3. SRW 6.1 vs 5.5 ly.
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