Written Commentary
SOYBEANS
Soybean futures managed a small gain after Tuesday USDA led rally. Dalian soybean, soymeal, soyoil and palmoil futures were higher after USDA report. USDA November soybean US data was bullish. There was a quick rally from key support. Some feel nearby futures may be in a 11.85-12.40 range. Bulls feel talk of food inflation and higher corn prices could support soybean due to historical price ratio. New November soybean deliveries suggest either delivery prices are higher than what commercial can buy from the farmer or future US gulf soybean export demand may be lower than hoped. Some still feel US 2021/22 soybean carryout could be closer to 400 than USDA 340 due to lower export demand. USDA estimated Brazil new crop soybean exports at a record 94 mmt vs 82 this year. Brazil and Argentina weather to date is favorable for crops. Brazil soybean plantings are ahead of normal. Soyoil is gaining on soymeal on talk of higher US demand for green fuel in 2022.
CORN
Corn futures traded higher. CZ tested 5.71. Next resistance is 5.86. USDA November corn World data was bullish corn. USDA did raise US corn crop but that was offset by higher ethanol demand. Weekly US ethanol production was down from last week but trade feels final US ethanol corn use could be up another 150 mil bu. US corn export prices are competitive to buyers. There is talk that China is buying Ukraine corn. US corn prices to China suggest record profit margins. Still, China may wait for 2022 to buy US corn. Private S/D analyst estimate US 2021/22 corn carryout closer to 1,150 vs USDA 1,493. Some est US 2022 corn planted acres at 90.5. Normal weather and similar use as this year suggest a 2022/23 US corn carryout near 1,200. All of this suggest CZ or CH22 should test 6.00. USDA estimated US 2021/22 World exporters stocks to use ratio at 8.8 pct vs 7.4. Still this includes 36 mmt more South America supply than last year. USDA estimates World corn trade at a record 203 mmt. Ukraine 31.5 vs 23.8 last year. US 63.5 vs 69.9. Brazil 43.0 vs 17.5. Argentina 39 vs 38.5. China is largest net buyer at 26 mmt, Mexico is next at 17. SE Asia is next at 17.3. Japan is 15.6. EU is 15.0. Egypt is 13. S Korea is 11.5.
WHEAT
Wheat futures traded sharply higher. KC futures made new highs. USDA November wheat World data was bullish wheat. USDA estimate of World wheat exporters stocks to use ratio is a record low 12 pct. Russia wheat export prices are still competitive to World buyers. World trade is up 12 mmt to date. Russia is trying to secure their wheat supplies for domestic demand. Russia may need to raise their export tax to reduce exports. Some estimate US 2022 wheat crop near 2,015 mil bu. Demand is est near 2,070 This could suggest a carryout near 640 vs 583 this year. This depends upon higher US acres and normal weather. Our weather guy US 2022 summer weather forecast is drier and warmer than normal. Battle for 2022 US acres already starting with higher planting cost could favor wheat and oilseeds vs corn. US buyer is less than 50% covered for Q1 and 20% or less for Q2. Basis has firm tone for all wheat and high end of the historical averages.
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