Mixed Grains Ahead of USDA Report
Grains are mixed. Quiet before the storm? USDA monthly US/World supply and demand report tomorrow. SF is up 5 cents and near 11.50. SMF is near 378.6. BOF is near 37.51. CH21 is up 1 cent and near 4.02. WH21 is down 2 cents and near 5.67. KWH21 is down 1 cent near 5.35. US stocks are higher. US Dollar is lower. Crude is higher. Gold is lower. Hope for a US stimulus deal offsets increase US virus cases.
S ½ of Brazil remains dry. Most of Argentina is warm and dry. Russia/Ukraine cold/dry. Snow next week.
Soybean futures near 3 week lows. C Brazil rains and no new US China sales offering resistance. Soymeal futures near 5 week lows. Lower China feed demand and lower crush margins offering resistance.
USDA report Thursday. Trade does not look for big changes to US corn, soybean, wheat 2020 balance sheet
Conab SA crop estimate also out Thursday. Trade est Brazil corn at 109 mmt vs USDA 110. Soy 132 vs 133. USDA should raise US soybean exports and lower US 2020/21 carryout but may wait until Jan report.
Funds were active sellers of corn on Tuesday. No new Corn export sales offered resistance.
Increase Covid cases could reduce US food and fuel demand. Increase ethanol stocks and lower margins.
There are rumors that China may have been a large buyer of US ethanol.
USDA should raise US corn exports and lower US 2020/21 carryout but may wait until Jan report. Warm/dry weather across parts of SA corn areas during pollination should lower their crop sizes.
USDA China Ag attaché estimate China corn imports near 22 mmt versus USDA Nov est of 13.
Ukraine corn export prices now competitive to EU. Corn exports to date 6.1 mmt versus 8.6 ly.
Most look for USDA to increase Canada and Australia wheat crop sizes on tomorrows report. This and talk of higher Russia/India/EU wheat exports has pushed China futures down to 10 week lows.US south plains still dry. Usually this is not traded until after the new year. Russia crop also lower.
On Tuesday, Managed funds were net sellers of 6,000 contracts of SRW Wheat; 21,000 Corn; sold 10,000 Soybeans; net sold 5,000 lots of Soymeal, and; net 5,000 lots of Soyoil. We estimate Managed Money net short 8,000 contracts of SRW Wheat; long 266,000 Corn; net long 187,000 Soybeans; net long 61,000 lots of Soymeal, and; long 110,000 Soyoil.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.