Starting Off Mixed Grain Prices
Grains are mixed. SH is up 14 cents and near 13.14. SMH is near 430.0. BOH is near 42.16. CH is up 5 cents and near 4.80. WH is down 1 cent and near 6.39. KWH is down 2 cents and near 5.99. US stocks are marginally lower. US Dollar is lower. Crude is lower. Copper is lower.
Chinese Ag futures (May) settled up 35 yuan in soybeans, up 24 in Corn, up 85 in Soymeal, up 62 in Soyoil, and up 38 in Palm Oil. Malaysian palm oil prices were up 14 ringgit at 3,602 (basis March) supported on supply concerns.
In Brazil, rain will be supportive of crops in most areas. An exception will be in Rio Grande do Sul where less frequent and more erratic rain will lead to some increase of crop stress. In Argentina, the struggle for any widespread moisture will continue. Any rain in week 1 of the outlook will be isolated. There is still some potential for greater rain Jan 9-13. Confidence is still low.
Word that Argentina has suspended old crop corn exports pushed corn futures to new highs. Argentina 2021 corn crop is rated only 17 pct good/ex. For all crops, Argentina farmer has sold only 23.5 mmt new crop versus 45.0 last year at this time. 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.
Rumors that US wheat was competitive for the Algeria tender pushed wheat to new highs. Given cost of freight US is not competitive but Wheat prices may be supported by higher corn and soybean prices and needed rains across US plains and Black Sea.
Soybean prices finally traded over 13.00 overnight. Talk of lower South America supplies and higher demand for US soybean continues to support prices. Asian oilseed markets traded higher overnight and are at new contract highs. Higher China soybean crush margins suggest they may imports as much as 110 mmt soybeans.
Weekly US corn export sales are estimated near 500-1,000 mt versus 651 last week, soybeans 200-700 mt versus 352 last week and wheat 2000-600 mt versus 393 last week.
2020 US stocks market low was 18,213, high 30,588. US Dollar high was 103.96. low 89.47. Crude low was 27.66 ,high was 49.52. Nearby corn low was 3.31, high 4.81. Soybean low 8.24, high 13.20. Chicago wheat low 4.88, high 6.44. Tightening US corn and soybean balance sheet should support higher prices in 2021. Dollar should continue to slide lower.
On Wednesday, Managed funds were net buyers of 20,000 contracts of SRW Wheat; 15,000 Corn; 10,000 Soybeans; 5,000 lots of Soymeal, and; 1,000 lots of Soyoil. We estimate Managed Money net long 30,000 contracts of SRW Wheat; long 365,000 Corn; net long 229,000 Soybeans; net long 100,000 lots of Soymeal, and; long 117,000 Soyoil.
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