Written Commentary
MORNING OUTLOOK
New month. Grains are mixed. SH is up 4 cents and near 13.74. SMH is near 432.3. BOH is near 44.24. CH is up 7 cents and near 5.54. WH is up 1 cent and near 6.42. KWH is down 1 cent and near 6.36. New grain news is lacking, which could suggest a volatile trading week. US stocks are higher. US Dollar is higher. Crude is higher. Reddit is buying silver.
Chinese Ag futures (May) settled up 13 yuan in soybeans, up 33 in Corn, down 1 in Soymeal, down 10 in Soyoil, and up 14 in Palm Oil.
Most bulls still feel higher China demand for US corn could tighten US 2020/21 corn carryout. CH is making new highs. CH support 5.40, Resistance is 5.60. Some thoughts will now turn to USDA Feb 9 report. Will USDA drop South America crops and increase US export demand? Some analyst look for final US exports closer to 2,900 mil bu versus USDA 2,550. This and an increase in domestic demand near 200 mil bu could drop US carryout close to 1,050 mil bu versus USDA 1,552. Early guess for US 2021 corn acres are near 94.0 versus 90.8 last year.
Most bulls still feel higher demand for US soybean and soymeal could tighten US 2020/21 soybean carryout. SH 20 day moving average support is 13.71. Resistance is 14.36. Some thoughts will now turn to USDA Feb 9 report. One group feels Brazil soybean crop is near 133.0. This is offering resistance to futures. Some analyst look for final US exports closer to 2,275 mil bu versus USDA 2,230. This and an increase in crush could drop US carryout close to 100 mil bu versus USDA 140. Early guesses for US 2021 soybean acres are near 90.0 versus 83.0 last year.
WH 20 day moving average support is 6.55. Resistance is 6.93. Talk of higher Russia export taxes and lower exports offers support. Russia is now considering and 70 pct export tax after June 1 on actual prices versus $200. Talk of increase in US export demand and Argentina export restrictions and slower EU exports should support prices.
On Friday, Managed funds were net buyers 0f 13,000 SRW Wheat; bought 35,000 Corn; net 13,000 Soybeans; 3,000 lots of Soymeal, and; net bought 1,000 Soyoil. We estimate Managed Money net long 19,00 SRW Wheat; long 404,000 Corn; net long 163,000 Soybeans; net long 72,000 lots of Soymeal, and; long 112,000 Soyoil.
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