Written Commentary
Morning Outlook
Grains are higher. SX is up 3 cents and near 10.53. SMZ is near 373.2. BOZ near 32.60. CZ is up 3 cents and near 4.05. WZ is up 8 cents and near 6.33. KWZ is up 7 cents and near 5.58. US stocks are higher. US Dollar is lower. Crude is lower. Gold is higher. US stimulus package?
For the week, SRW Wheat prices were up roughly 32 cents; HRW up 23; HRS up 16; Corn was up 7 cents; Soybeans down 15; Soymeal up $2.00, and; Soyoil down 100 points. Crushing margins were up 1 cent at $1.09; Oil share was unchanged at 31%.
Chinese Ag futures (January) settled up 167 yuan in soybeans, up 40 in Corn, up 20 in Soymeal, down 58 in Soyoil, and down 84 in Palm Oil. Malaysian palm oil prices were down 98 ringgit at 2,772 (basis January) following rival vegoils, concerns over slowing import demand from India and others.
The US Southern Plains over the 6 to 10 day period has light to moderate rainfall in the eastern half of KS, OK, and TX. Temps will run above average for most of the week before falling to below average for the weekend and early next week.
The Brazilian growing regions has light to moderate rainfall covering 75% of the area in the north with things quiet in the south. The 6 to 10 day has moderate rainfall for 80% of the growing regions. The Argentine growing regions has moderate rainfall for most areas the first half of the week before turning dry the remainder of the week. The 6 to 10 day models are mixed with the GFS seeing widespread rainfall whereas the European sees little rainfall in Buenos Aries with light to moderate rainfall in the rest of the growing areas.
Long-awaited rains arrived in part of Russia’s winter wheat-sowing regions over the weekend after dry weather. The head of the IKAR agriculture consultancy said more rains are still needed in these regions.
The player sheet had funds net buyers of 3,000 SRW Wheat; net sold 2,000 Corn; sold 10,000 Soybeans; sold 4,000 Soymeal, and; net sold 1,000 Soyoil. We estimate Managed Money net long 60,000 contracts of SRW Wheat; long 207,000 Corn; net long 232,000 Soybeans; net long 86,000 lots of Soymeal, and; long 78,000 Soyoil.
Corn is up on global weather concerns and demand for US exports. Some estimate China total corn imports at 25-30 mmt vs USDA est of 7 mmt. Could take 20-23 mmt from US. Concern is increasing as to where EU will source corn import needs. Some C IL corn yields are near 210-225 bpa versus USDA 200. US harvest is near 54 pct versus 41 last week.
Soybean are up on China demand and South America weather concerns. Some estimate China total soybean imports at 105 mmt vs USDA est of 100 mmt. Could take 40 mmt from US. Late Brazil 2021 soybean harvest could increase China demand for US Jan-Feb. Some C IL soybean yields are near 50-55 bpa versus USDA 60. US harvest is near 80 pct versus 61 last week.
Wheat is higher on global weather concerns. Argentina lowered their wheat crop 2 mmt to 19. Matif/CME Black Sea futures are near new highs. Australia futures are near 6 month highs.
On Friday, Managed funds were net buyers of 3,000 SRW Wheat; net sold 2,000 Corn; sold 10,000 Soybeans; sold 4,000 Soymeal, and; net sold 1,000 Soyoil. We estimate Managed Money net long 60,000 contracts of SRW Wheat; long 207,000 Corn; net long 232,000 Soybeans; net long 86,000 lots of Soymeal, and; long 78,000 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.
