Written Commentary
MORNING OUTLOOK
TGIF. Grains are mixed. SH is down 8 cents and near 14.22. SMH is near 463.7. BOH is near 42.53. CH is down 1 cent and near 5.33. WH is up 14 cents and near 6.84. KWH is up 13 cents and near 6.50. There is a wave of soybean and corn profit taking in front of the long US Holiday weekend. CBOT grains are closed Monday. Lower palmoil prices are also pulling down the soybean complex. There is no sign of soybean and corn price rationing yet. Russia wheat export tax is helping wheat. US stocks are lower. New POTUS asking for more stimulus which could increase US debt to $30 trillion. US Dollar is higher. Crude is lower. Copper is higher.
For the week, SRW Wheat prices are up roughly 42 cents; HRW up 50; HRS up 40; Corn is up 74 cents; Soybeans up 52 cents; Soymeal up $24.00, and; Soyoil down 95 points. Crushing margins are down $0.03 at $0.68 (March); Oil share down 2% at 31%.
Chinese Ag futures (May) settled down 10 yuan in soybeans, up 6 in Corn, unchanged in Soymeal, down 108 in Soyoil, and down 148 in Palm Oil. Malaysian palm oil prices were down 102 ringgit at 3,425 (basis March) on ideas of slipping exports (earlier chart).
In Brazil, conditions are good in most areas. Some pockets of Rio Grande do Sul may become a little too dry. In Argentina, a meaningful and needed rain event will occur in much of the nation Friday through Saturday. A lengthy period of dryness will still follow the rain event leading to some increase of crop stress.
All U.S. Wheat sales up 8% vs a year ago; shipments down 1%; with the USDA forecasting a 2% increase. Corn sales up 135%, shipments up 77% with USDA up 43%. Soybean sales up 83%, shipments up 77% with USDA up 33%. There is talk US sold HRW to Brazil.
The International Grains Council (IGC) on Thursday cut its forecast for a record global grains production by 9 million tonnes to 2.21 billion tonnes in 2020. IGC cut its global corn production forecast by 13 million tonnes to 1.133 billion tonnes although it remained slightly up on the prior season’s 1.124 billion tonne crop. The IGC raised its forecast for 2020/21 world wheat production by 3 million tonnes to 768 million tonnes. World wheat production in 2021/22 was seen rising by 3% to a record 791 million tonnes with consumption also projected to climb by 3% to 775 million tonnes, also an all-time high.
On Thursday, Managed funds were net buyers of 8,000 SRW Wheat; bought 30,000 Corn; net bought 18,000 Soybeans; bought 6,000 lots of Soymeal, and; bought 6,000 lots of Soyoil. We estimate Managed Money net long 40,000 contracts of SRW Wheat; long 428,000 Corn; net long 236,000 Soybeans; net long 110,000 lots of Soymeal, and; long 111,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 7,100 contracts; HRW Wheat down 510; Corn up 8,300; Soybeans up 11,100 contracts; Soymeal up 640 lots, and; Soyoil up 755.
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