Written Commentary
MORNING OUTLOOK
Month end. Grains are higher. SH is up 18 cents and near 14.88. SMH is near 417.1. BOH is near 66. 08. CH is up 3 cents and near 6.39. WH is up 7 cents near 7.93. KWH is up 8 cents and near 8.10. MWH is up 11 cents and near 9.31.
Futures markets are watching Russia and Ukraine tension, SA/US weather and US Central Bank fight against inflation. World inflation has pushed World food prices to near record high. US stocks are mixed. US Dollar is lower. Crude is higher.
Soybean futures are up on talk of lower SA soybean supplies which could increase demand for US soybeans. Last week, one group increased their US 2021/22 soybean crush 30 mil bu and dropped their estimate of the carryout to 314 vs USDA 350. They left exports unchanged at 2,050. China is on New Year holiday but there is talk of their increase interest in US 2021/22.
Soybeans. Some now estimate SA soybean losses at 20-30 mmt or 730-1,100 mil bu. Next 2 weeks could see net drying in Argentina, Paraguay and S Brazil. Trade over 15.00 could suggest a test of 16.00. Increase demand for soyoil could suggest a test of 80 cents.
Corn futures are grinding higher on talk of lower SA supplies, uncertainty over Black Sea corn exports and talk of higher demand for US corn. Last week, one group increased their US 2021/22 corn export and ethanol use a total of 346 mil bu and dropped their estimate of the carryout to 1,194 vs USDA 1,540. Some now estimate SA corn losses at 10-14 mmt or 400-470 mil bu. Some feel higher highs in futures could suggest CH or CK testing 6.80-7.00.
Wheat futures found support near 7.70 WH and 7.90 KWH. Increase tension between Russia and Ukraine and increase threat of financial response to a Russia invasion has added some risk premium to wheat futures. Continued tender activity by World buyers has also pushed prices higher. Initial resistance is near 8.14 KWH then 8.46.
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