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Ag Market View for Jan 20 22

SOYBEANS

Soybeans ended higher and above key resistance. Talk of lower South America crop and potential new China demand for US new crop soybeans offered support. There is also talk that Managed money may be buying soybeans as a hedge against inflation. Soyoil is up on higher palmoil prices and talk of higher biodiesel demand for soyoil. There is also talk that some crop watchers have dropped their estimate of the Brazil soybean crop below 130 mmt. USDA estimated SA soybean crop at 194 mmt, down 9.5 from December. Some feel the crop could now be down another 14 mmt. Weekly US soybean export sales are est near 600-1,200 mt vs 735 last week. There are rumors China may be looking to buy 1.5 mmt US new crop US soybeans. There are some that feel next SH upside target could be 14.75. BOH could test 64.00.

CORN

Corn futures ended mixed. Nearby CH ended near 6.11 and 1 cent above CK. Talk of higher demand for US corn export supports US corn basis and futures. China corn prices are near $11.00. Brazil domestic corn prices are near $8.00. Matif corn futures were higher due to EU need for corn. Some fear that increase conflict between Russia and Ukraine could reduce Ukraine exports to EU. USDA estimated Brazil+Argentina corn crop at 169 mmt, down 3.5 from December. Some feel the crop could now be down another 12 mmt. Weekly US corn export sales are est near 500-1,000 mt vs 457 last week. There are rumors China may be looking to buy 1.5 mmt US new crop corn. Weekly US ethanol production was up 4 pct from last week and 11 pct last year. Stocks were up 3 pct from last week and near last year. Margins have turned lower. Some feel USDA could be 100 mil bu to low in final corn use for ethanol and 255 too low for exports. This could lower US 2021/22 corn carryout to 1,195 mil bu or a stocks to use ratio of 7.9 pct. USDA carryout is 1,540. Same group est US 2022 corn acres at 91.5 vs 93.4 in 2021. Total demand is est at 14,575 mil bu vs USDA 2021/22 14,835. US 2022 yield would need to be near 179.5 vs 177.0 ly for the 2022/23 carryout to be near 1,600. Trade over 6.17 CH suggest a test of 6.40.

WHEAT

Wheat futures ended mixed. Futures paused due lack of new news about Russia and Ukraine tension. Some World wheat buyers are asking about delivery on open Black Sea wheat unshipped contracts if Russia invades Ukraine. Despite the need for new export demand, Matif wheat futures traded higher. There are some that feel EU wheat export pace may eventually exceed supply. There are also some that assuming Russia will not invade Ukraine that their final exports could fall short of USDA Russia export estimate. N Africa weather is still drier than normal and some feel their import needs could be higher than USDA estimate. This could draw down World wheat end stocks. Weekly US wheat exports sales are est at 175-400 mt vs 264 last week. US south plains remain dry. NOAA 90 day weather forecast calls for above normal temps and below normal precip. WH ended near 7.90. WN near 7.81. KWN was near 7.96. KWN 8.00. MWN ended near 9.45.  

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.

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