Written Commentary
MORNING OUTLOOK
Grains are lower. SF is down 9 cents and near 11.66. SMF is near 390.8. BOF is near 37.99. CZ is down 4 cents and near 4.21. CH21 is near 4.26. Better the expected rains in central and north Brazil is weighing on soybean and corn values. WZ is down 2 cents and near 5.95. WH21 is near 6.03. KWZ is down 2 cents and near 5.55. KWH21 is near 564. US stock market is lower. Crude is lower. US Dollar is higher. Gold is lower. Increase cases of virus globally may be weighing on financial and energy markets.
Soybean prices are retreating on news that central and north Brazil saw .50-2.50 inches of rain. This was more than expected. There is also talk that the dry areas of south Brail and north Argentina could see some new rains. Lack of new China buying US soybeans is also offer resistance near new contract highs. China soybean crush margins have turned negative. Trade looks for US weekly soybean export sales to be near 600-1.2 mmt versus 1.486 last week.
Corn futures are also lower. Recent US farmer selling has dropped domestic cash basis and put CZ-CH spread into a carry. Talk of a 2021 vaccine could help domestic fuel use and ethanol demand. Still market needs more export sales to push higher. Tight US 2020/21 corn supplies is still supportive to prices long term. Rains on central and north Brazil offers resistance. Forecast of rain in dry south Brazil has also triggered new fund selling overnight. Weekly US corn export sales are estimated near 600-1,000 mt versus 978 last week.
Wheat futures are also lower on the higher US Dollar and following the lower corn price action. Many feel wheat futures are in a range with talk of dry weather in US and Russia supportive but slowdown in food demand due to increase virus cases offering resistance. NOAA 30 and 90 day weather forecast will be out today. Russia will meet today to discuss wheat export quotas. Weekly US wheat sales are estimated near 250-500 mt versus 300 last week.
On Wednesday, Managed funds were buyers of 4,000 contracts of SRW Wheat; bought 12,000 Corn; bought 6,000 Soybeans and; net bought 8,000 lots of Soyoil. We estimate Managed Money net long 24,000 contracts of SRW Wheat; long 266,000 Corn; net long 257,000 Soybeans; net long 84,000 lots of Soymeal, and; long 115,000 Soyoil.
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