Written Commentary
Soybeans, soymeal, corn and wheat traded higher. US stocks were lower. US Dollar was higher. Crude was lower. Gold was higher. Funds still covering shorts in silver.
SOYBEANS
Soybean traded in a wide range and closed higher. Soymeal gained on soyoil on the close. SH range was 13.35-13.76. 20 day moving average is near 13.67. Soybean found support due to talk of higher US soybean export demand. Resistance was from fact daily new sales were to China but new crop. Safras Mercado estimated Brail 2021 soybean crop near 133.1 mmt. This is up from previous est of 132.5. USDA is 133.0. They estimate acres up 3 pct to 38.6 million hectare or 95.4 million acres. USDA next supply and demand report will be Feb 9. In Jan, USDA estimated US soybean crush near 2,200 versus 2,165 last year and exports near 2,230 versus 1,682 last year. Soybean export commit is near 2,125 mil bu versus 1,161 last year. USDA estimates US carryout near 140 which some feel is minimum pipeline. Some could see China needing to switch 50-100 mil bu soybean from Brazil to US due to Brazil late harvest. A US carryout below 100 mil bu suggest soybean futures over 15.00.
CORN
Corn futures traded higher. CH made new highs. CH range was 5.33-5.53. News of new China buying US corn offered support. Continued increase fund buying and increase price volatility offers resistance. USDA announced 2,108 mt US corn sold to China. Some feel this brings China buying to near 6.0 mmt. Some feel they bought a total of 8.0 mmt US corn. Some feel China could import 30 mmt of corn, 5.0 from Ukraine, 3.0 from Brazil and 22.0 from US. USDA last guess was 17.5. This suggest in Feb USDA could increase global corn trade 10-12 mmt. In Jan, USDA estimated US corn feed and residual near 5,650 versus 5,903 last year, ethanol 4,950 versus 4,852 last year and exports near 2,550 versus 2,650 est in Dec and 1,778 last year. Corn export commit is near 1,916 mil bu versus 848 last year. USDA estimates US carryout near 1,552. Some could see final exports up 300 mil bu and domestic use up 200. This would suggest a carryout closer to 1,052. Price models suggest March corn futures near 6.00-6.25.
WHEAT
Wheat futures traded higher. Uncertainty over actual wheat exports from Russia, EU and Argentina. Offers support. Higher corn futures also offered support. Slow Global trade offers resistance. WH closed near 6.63. Range was 6.43-6.64. 20 day moving average is near 6.54. In Jan, USDA estimated US wheat feeding near 125 versus 101 last year, food use 965 versus 962 last year and exports near 985 versus 965 last year. Some feel drop in Russia, EU and Argentina wheat exports could shift some demand to US. Uncertain US 2021 weather could also lower US 2021/22 wheat carryout. Sovecon estimated Russia wheat exports at 37.9 mmt versus 36.3 previous. USDA is 39.0. Key to price direction in 2021 may depend upon US weather/yield and final demand. Weather watchers still trying to figure out 2021 north hemisphere weather. USDA annual Outlook conference is Feb 18-19. This will be their first look at US 2021/22 supply and demand.
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