Written Commentary
Mid-Day Outlook
Grains are mixed to higher led by corn and wheat. SK is up 8 cents and near 14.16. SX is up 4 cents and near 12.75. SMK is near 407.6. BOK is near 53.11. CK is up 19 cents and near 5.79. Irrational exuberance? CZ is up 7 cents and near 4.93. WK is up 13 cents and near 6.29. KWK is up 16 cents and near 5.79. MWK is up 17 cents and near 6.41. Weather, weather, weather. US stocks are mixed. US Dollar is lower. US Fed offering more accommodation if needed is weighing on the Dollar. Gold is higher. Risk on?
Managed funds have been net buyers of 5,000 SRW wheat, 10,000 corn, 5,000 soybeans and 2,000 soyoil and net sellers of 1,000 soymeal. We estimate Managed funds to be net long 2,000 wheat, long 441,000 corn, 176,000 soybeans, 66,000 soymeal and 96,000 soyoil.
Wheat futures continue to trend higher. There is increase concern about US north plains and Canada prairie dry conditions. Long range maps hints of some showers late next week but then dryness return. It is also dry in West EU. US south plains and Ukraine. Long range maps also hint of some rain in west US south plains. Weekly US export sales were only 3 mil bu. Total commit is near 925 mil bu vs 920 last year. USDA goal including flour is 985 vs 965 last year. USDA is not expected to make big changes tomorrow US/World wheat supply and demand.
Corn futures are up sharply as traders add to long positions into tomorrows USDA report. Some feel USDA could raise US 2020/21 corn demand and drop carryout below average trade guess of 1,379 nil bu. Most private analyst are using a carryout closer to 1,200. US domestic cash corn basis is higher which is also helping support CK. Beyond this year, US 2021 corn acres guess times a record yield minus normal demand could suggest a US 2021/22 carryout near 850 mil bu. If realized CZ is too low. A few weather watchers are also increasing odds that US summer weather could be drier and warmer than normal.
Soybean trade is mixed. So far soybean futures do not have the weather push that is helping wheat or the expectations that tomorrows USDA will be bullish soybean as much as corn. World vegoil prices are higher but concern over China pig herd due to ASF and lower South America soymeal prices continues to weigh on soymeal values. Still most private analyst could see US 2020/21 soybean carryout below 100 mil bu and some are using US 2021/22 soybean carryout below zero. If realized, SX is too low. Weekly US soybean export sales were a negative 3 mil bu. Total commit is near 2,232 mil bu vs 1,368 ly. China commit is near 35.8 mmt with 2.0 in unknown.
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