Written Commentary
GRAINS OUTLOOK
Grains are mixed.. SH up 9 cents and near 11.75. SMH is near 382.6 BOH is near 38.67. CH is up 2 cents and near 4.25. WH is down 6 cents and near 6.08. KWH is down 6 cents and near 5.75. US stocks are higher. US Dollar is lower. Crude is higher. Gold is lower. Last week, CRB Commodity Index tested key resistance. Untapped investment money is positive. Lower Dollar and vaccine optimism could offer commodity support for first time since late 1970’s
For the week, SRW Wheat prices were up roughly 36 cents; HRW up 35; HRS up 20; Corn was up 3; Soybeans up 1 cent; Soymeal down $2.00, and; Soyoil down 10 points. Crushing margins were $0.91 (MCH); Oil share 33%.
Chinese Ag futures (May) settled down 135 yuan in soybeans, down 14 in Corn, down 15 in Soymeal, up 80 in Soyoil, and up 34 in Palm Oil. Malaysian palm oil prices were up 42 ringgit at 3,452 (basis February) on reports of supply disruptions in Malaysia and Indonesia.
Corn futures are higher. Some now estimate Brazil corn crop closer to 105 and Argentina 45. Target 4.50-4.60 CH high. Combined private estimates of SA corn crop is 375 mil bu below USDA guess. Most analyst still forecast US 2020/21 corn carryout near 1,500 versus USDA 1,702.
Wheat futures are lower. Last week, Wheat traded higher on Russia export tax and possible lower exports. Some feel Russia will now try to increase wheat exports before taxes take effect Feb 15. Lower US/Russia crop should be supportive. Some now estimate final Russia wheat crop close to 72 mmr versus USDA 84.
Soybean futures are higher. Some est US final exports up 150-175 from USDA. Some now estimate Brazil soybean crop closer to 128 mmt vs USDA 133,Could drop to 126. Mondays US soybean export inspections could be a record 100 mil bu. US 2020/21 carryout dropping to 30?
On Friday, Managed funds were net buyers of 18,000 contracts of SRW Wheat; 7,000 Corn; 6,000 Soybeans; 4,000 lots of Soymeal, and; 1,000 lots of Soyoil. We estimate Managed Money net long 37,000 contracts of SRW Wheat; long 284,000 Corn; net long 151,000 Soybeans; net long 66,000 lots of Soymeal, and; long 95,000 Soyoil.
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