Written Commentary
TODAY—DELIVERABLE STOCKS—
Overnight trade has SRW Wheat up roughly 1 cent, HRW up 1; HRS Wheat up 2, Corn is unchanged; Soybeans down 3; Soymeal down $2.50, and Soyoil down 10 points.
Chinese Ag futures (May) settled down 23 yuan in soybeans, down 1 in Corn, down 35 in Soymeal, down 100 in Soyoil, and down 102 in Palm Oil.
Malaysian palm oil prices were up 7 ringgit at 3,549 (basis March) resuming support on supply concerns.
The GFS model forecast last evening did not change much for Brazil. The bulk of center west and center south crop areas get routinely occurring rainfall over the next two weeks resulting in favorable crop development.
Net drying is still expected in far southern Brazil, Uruguay, southern Paraguay and eastern Argentina during the coming two weeks.
For Argentina, the model further diminished rainfall in this first week of the outlook raising the potential for more significant crop stress because of limited rain and warm temperatures. The precipitation increases in Argentina for the Jan. 6-12 period will be welcome if they verify, but the nation is still not expected to get a general soaking of rain and crops will likely continue to struggle for moisture through the entire forecast period.
The European model forecast has not diminished rainfall in Argentina as much as the GFS model run.
The player sheet had funds net sellers of 11,000 contracts of SRW Wheat; bought 17,000 Corn; net sold 9,000 Soybeans; sold 1,000 lots of Soymeal, and; sold 1,000 lots of Soyoil.
We estimate Managed Money net long 7,000 contracts of SRW Wheat; long 325,000 Corn; net long 199,000 Soybeans; net long 85,000 lots of Soymeal, and; long 111,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures down roughly 3,500 contracts; HRW Wheat down 190; Corn up 2,100; Soybeans down 20,000 contracts; Soymeal down 5,500 lots, and; Soyoil down 3,400.
There were no changes in registrations—Registrations total 49 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 100; Soyoil 1,313 lots; Soymeal 200; Rice 313; HRW Wheat 113, and; HRS 1,041.
Loading of more than 140 agricultural export ships in Argentina has been stalled by a port-side oilseed workers’ strike that started on Dec. 9, the head of the local chamber of soymeal manufacturers said on Monday, on the eve of talks on a new contract. The CIARA-CEC chamber of soy byproduct manufacturers will meet on Tuesday with the two main unions representing oilseed workers to try and hammer out a 2021 compensation package.
Russian wheat export prices rose for the second consecutive week last week ahead of an upcoming wheat export tax, analysts said on Monday, adding that trade was thin before the long New Year holiday. Russian wheat with 12.5% protein loading from Black Sea ports for supply before mid-February was at $262 a tonne on a free-on-board (FOB) basis at the end of last week, up $5 from the week before, the IKAR agriculture consultancy said in a note. Sovecon said wheat and barley export prices rose by $2 to $261 a tonne and $220 a tonne.
The SovEcon agriculture consultancy said on Monday that it had downgraded its estimate for Russia’s 2020/21 wheat exports to 36.3 million tonnes from a previously expected 40.8 million tonnes due to an upcoming wheat export tax. Russia is trying to stabilize food prices with a grain export quota and a wheat export tax from Feb. 15 to June 30.
Ukrainian wheat export prices have risen by $3 per tonne over the past week thanks to a strong demand from exporters concerned about the uncertainty with wheat exports from Russia, analyst APK-Inform said. Ukrainian 12.5% protein wheat ask prices reached $263 per tonne FOB Black Sea at the end of past week, the consultancy said in a report. Ukraine plans to export 17.5 million tonnes in the 2020/21 July-June season.
European wheat futures in Paris fell on Monday, pushed down by a sharp fall in U.S. markets and selling pressure after EU prices hit near four-week highs last week. Chicago wheat fell 2.1% on Monday, pulling back from highs hit before Christmas. Benchmark March milling wheat unofficially closed down 0.4%, or 1.0 euro, at 210.75 euros ($257.3) a tonne after earlier dropping to 208.25 euros.
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