Grains Higher on Wet Weather Pattern
Grains are higher. SX is up 9 cents and near 10.73. SMZ is near 377.2. BOZ near 33.55. Soyoil rallied on higher Malaysian palmoil prices due to production concerns due to lack of labor. CZ is up 3 cents and near 4.11. Soybean and corn futures may be adding a little weather premium due to US wet weather pattern that could delay harvest. WZ is up 2 cents and near 6.34. KWZ is up 4 cents and near 5.75. Dry Russia and US south plains weather offers support to wheat futures. Some analyst could see Chicago wheat futures testing 7.00.
US stocks are mixed. US closer to stimulus deal? EU stocks are lower. US Dollar is lower. Crude is lower. Gold and Copper are higher. US elections are getting closer. Covid virus cases continue to increase.
Chinese Ag futures (January) settled down 66 yuan in soybeans, down 8 in Corn, up 19 in Soymeal, up 136 in Soyoil, and up 120 in Palm Oil. Malaysian palm oil prices were up 35 ringgit at 2,893 (basis January) with better export demand being seen.
The US Midwest 6 to 10 day forecast has moderate rainfall favoring the eastern Midwest with near 100% coverage; lesser amounts look to fall north and west. Temps look to be turning below average by the weekend and into next week. The Southern Plains over the 6 to 10 day period has rainfall favoring the eastern two-thirds of OK and TX. Temps are seen turning to below average by the weekend and into next week.
The Brazilian growing regions over the next 6 to 10 day period has moderate rainfall to near 90% of the growing areas. The Argentine growing regions has rainfall favoring the southern areas over the next 6 to 10 days with things mostly quiet elsewhere.
There are no Brazil export prices Nov-Jan. China may be slowing new US buying. Brazil plantings are delayed but weather looks to be improving. Some talk Brazil may need to import soybeans before their 2021 harvest. Argentina farmer is still a reluctant seller of soybeans. Ranges of guesses for US 2020/21 soybean carryout is 170-255 versus USDA 290. Range for US exports is 2,250-2,350 versus USDA 2,200. Some analyst could see soybean futures testing $12.00
US corn export prices is near $226 versus Brazil $231. Argentina $231 and Ukraine $229. China may be increasing new US buying. Brazil plantings are delayed but weather looks to be improving. There is talk that Brazil old crop corn supply is tight. Argentina farmer is still a reluctant seller of corn. EU corn feed use may be replaced by feed wheat due to lower import outlook. Ranges of guesses for US 2020/21 corn carryout is 1,855-2,255 versus USDA 2,167. Range for US exports is 2,325-2,550 versus USDA 2,325. Some analyst could see corn futures testing $5.00. Yesterday, cattle and hog futures traded lower.
On Tuesday, Managed funds were net buyers of 4,000 SRW Wheat; bought 12,000 Corn; bought 10,000 Soybeans; were net even in Soymeal, and; net bought 6,000 Soyoil. We estimate Managed Money net long 66,000 contracts of SRW Wheat; long 228,000 Corn; net long 247,000 Soybeans; net long 91,000 lots of Soymeal, and; long 81,000 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.