Written Commentary
MORNING OUTLOOK
Grains are mixed. SX is down 2 cents and near 10.81. SMZ is near 383.50. BOZ is near 34.55. CZ is down 2 cents and near 4.16. WZ is down 9 cents and near 6.23. KWZ is down 14 cents and near 5.55. US Dollar is higher. US stocks are lower. Crude is lower. Gold and copper are lower. Some weakness in stocks and energy going into US elections. Higher US Dollar is weighing on metals. There may be no new US stimulus deal until after the US elections.
For the week, SRW Wheat prices were up roughly 7 cents; HRW up 11; HRS up 18; Corn was up 17 cents; Soybeans up 31; Soymeal up $17.00, and; Soyoil up 95 points. Crushing margins were up 18 cents at $1.27; Oil share is down 1% at 30%.
China plenum is this week. Some feel they will announce infrastructure spending to help their economy and increase China demand for imported base meals and other raw materials.
Chinese Ag futures (January) settled up 62 yuan in soybeans, up 11 in Corn, down 2 in Soymeal, up 66 in Soyoil, and up 46 in Palm Oil. Malaysian palm oil prices were up 51 ringgit at 2,993 (basis January) at midsession tracking rival vegoils.
U.S. hard red winter wheat areas are now expecting significant rain, freezing rain, sleet and snow in some of the driest areas during the early to middle part of this week.
Brazil rainfall was sufficient for a notable boost in soil moisture in Minas Gerais and Goias where rain totals varied from 0.60 to more than 1.50 inches. Lighter and more sporadic rain occurred in other areas of Brazil allowing fieldwork to advance, although pockets still need significant rain Brazil’s rainfall is similar for the coming ten days as to that of Friday. Rain will fall in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south.
Argentina weekend rainfall was sufficient for a notable boost in soil moisture and improved soil and crop conditions. Rainfall varied from 1.00 to 2.50 inches in heart of summer crop country with local totals to 3.00 inches Argentina will receive additional rain into Monday morning and then a few follow up showers Tuesday and Wednesday before dry weather occurs for about a week.
Western CIS crop weather this week will bring erratic precipitation and warmer than usual temperatures; winter crops are turning dormant in the west and north which is normal. Ukraine precipitation will be limited after this week with the best chance for moisture during mid- to late-week.
Soybean futures have been supported by China buying US and talk of lower Brazil soybean , soymeal and soyoil old crop supply and lower Argentina soymeal exports. Could be some long liquidation into month end and US elections. US soybean harvest is estimated near 83 pct versus 75 last week and 74 average.
Corn and wheat could also be seeing some long liquidation due to forecast of rains in US south plains and parts of Russia. Corn has been supported by lack of US and Argentina farmer selling and tight South America old crop supplies. US corn harvest is estimated near 73 pct versus 60 last week and 57 average. Wheat has been a weather marker rally due to talk of lower 2021 Russia supplies.
On Friday, Managed funds were net buyers of 6,000 SRW Wheat; bought 9,000 Corn; bought 8,000 Soybeans; bought 4,000 Soymeal, and; net bought 2,000 Soyoil. We estimate Managed Money net long 51,000 contracts of SRW Wheat; long 253,000 Corn; net long 249,000 Soybeans; net long 94,000 lots of Soymeal, and; long 87,000 Soyoil.
Preliminary Open Interest saw HRW Wheat up 1,400; Corn down 14,500; Soybeans down 40,000 contracts; Soymeal down 2,300 lots, and; Soyoil up 1,000.
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