Written Commentary
MORNING OUTLOOK
Grains are sharply higher. SH is up 34 cents near 13.45. SMH is near 438.7. BOH is near 43.90. CH is up 11 cents and near 4.95. WH is up 9 cents and near 6.49. KWH is up 6 cents and near 6.10. Need to slow demand due to tightening US 2020/21 corn and soybean balance sheets may be pushing prices higher.
For the week, SRW Wheat prices were up roughly 14 cents; HRW up 14; HRS up 17; Corn was up 33 cents; Soybeans up 47 cents; Soymeal up $15.00, and; Soyoil up 125 points. Crushing margins were up $0.02 at $1.00 (March); Oil share up 1% at 33%.
Chinese Ag futures (May) settled down 13 yuan in soybeans, up 24 in Corn, up 74 in Soymeal, up 120 in Soyoil, and up 112 in Palm Oil. Malaysian palm oil prices were up 124 ringgit at 3,724 (basis March) the highest levels since 2014 following rival veg oils and Argentine supply concerns.
Every commodity; Crude, Gold. Copper, coffee, cocoa, sugar and cotton are higher. US Dollar continues to trend lower. Trade will be watching the level of vaccine versus new virus cases, Money flow and transition of power in Washington. Talk of higher US debt will weigh on US Dollar. GA Senate race key to control on the Senate with talk Democratic Senate could increase US debt by $30 trillion.
Argentina 2021 corn crop is rated only 17 pct good/ex. Some estimate South America 2021 corn crops at 147 mmt vs USDA 159 and 153 ly. Exports at 66 mmt vs USDA 73 and 72 last year. Some are increasing US corn exports 120-140 mil bu. Some estimate US 2020/21 corn carryout near 1,400 versus USDA 1,702 and 2021/22 US carryout near 1,350. Next CH resistance 5.16 then 5.50.
Algeria paid a new high near $292 for wheat. Wheat prices may be supported by higher corn and soybean prices and needed rains across US plains and Black Sea. US 2020/21 HRW end stock could drop 100-125 mil bu below last year. This should still support KC futures. Next WH resistance 6.77.
Soybean prices finally traded over 13.00. Asian oilseed markets traded higher last week and are at new contract highs. Higher China soybean crush margins suggest they may imports as much as 110 mmt soybeans. me estimate US 2020/21 soybean carryout near 100 versus USDA 175 and 2021/22 US carryout near 104. Next SH resistance 14.00, SMH 460 and BOH 45.
On Thursday, Managed funds were net even SRW Wheat; bought 10,000 Corn; 10,000 Soybeans; 2,000 lots of Soymeal, and; 4,000 lots of Soyoil. We estimate Managed Money net long 30,000 contracts of SRW Wheat; long 375,000 Corn; net long 239,000 Soybeans; net long 102,000 lots of Soymeal, and; long 121,000 Soyoil.
CFTC weekly report was delayed until Monday due to Holiday.
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