Written Commentary
MORNING OUTLOOK
Grains are higher. SK is up 12 cents and near 14.20. SMK is near 430.6. BOK is near 48.67. CK is up 1 cent and near 5.54. WK is up 1 cent and near 6.72. KWK is up 1 cent and near 6.48. US Dollar is lower. Crude is higher.
On March 15th, CBOT position limits will rise to 57,800 contracts in corn (from 33,000), 27,300 contracts in soybeans (from 15,000 contracts), and to 19,300 contracts in wheat (from 12,000 contracts).
Chinese Ag futures (May) settled up 62 yuan in soybeans, up 9 in Corn, up 59 in Soymeal, up 106 in Soyoil, and up 122 in Palm Oil. Malaysian palm oil prices were up 24 ringgit at 3,652 (basis May).
Net drying will continue across much of Argentina through next Tuesday. Last evening’s GFS model run removed a notable amount of rain that was shown in the midday GFS model for the nation Mar. 5 – 10, particularly in central and southeastern Argentina. Conditions in most of Brazil will continue to be favorable.
World vegoil prices continue to trade higher and many making new contract highs. China is said to be a buyer of April-MY Malaysian palmoil. BOH is near 50 cents and highest since 2013. Brazil soybean harvest is near 35 pct. Central yields are lower than expected. South yields are improving as harvest advances. Brazil soybean export values continue to drop due to lack of new China buying.
CK continues upward trend. Support is near 5.40. Resistance is near 5.60. Talk of lower US 2020 supplies and need for higher US 2021 acres is supportive. Weekly US ethanol production should see a steep drop due to last weeks plant closures due to record cold temps. Managed funds continue to add to longs making trade vulnerable to volatile swings especially into USDA March reports and US spring planting weather.
Wheat futures continue to inch higher led by uncertain EU and Russia export pace. Last weeks record cold temps add to uncertainty for US 2021 HRW crop size. Wheat also following corn prices higher on talk of higher 2021 World wheat feeding. Managed funds also adding to Chicago wheat long.
On Tuesday, Managed funds were net buyers of 2,000 SRW Wheat; 6,000 contracts of Corn; bought 13,000 Soybeans; 3,000 lots of soymeal, and; 5,000 Soyoil. We estimate Managed Money net long 31,000 contracts of SRW Wheat; long 381,000 Corn; net long 186,000 Soybeans; net long 70,000 lots of Soymeal, and; long 124,000 Soyoil.
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