Written Commentary
Month end. Grains are mixed. SN is down 2 cents and near 8.44. CN is up 1 cent and near 3.28. WN is up 1 cent and near 5.15. US stocks are lower. Crude is lower. US Dollar is lower. Gold is higher. Silver is higher.
Today commodity and equity markets are watching closely US reaction to the fact China has voted to take control over Hong Kong. POTUS has a press conference today concerning China. US sanction on China could offer resistance to US equities and commodities especially soybean and Crude.US Dollar is at 2 month low.
Corn and wheat futures rallied yesterday. This despite negative World 2020/21 numbers and fact US farmer has a large corn inventory to sell. Lack of US farmer selling to date has rallied cash basis which at times should help futures. Funds were massive buyers of futures on Thursday. Will the cover additional shorts today. Hot and Dry plains and US Midwest weather next week may have triggered the buying in corn and wheat. EU lowered their estimate of the 202 wheat crop. Russia interior wheat prices firmed on new demand. Germany and Russia wheat export prices are at a discount to US.
Soybean prices are up to US and China relations. Iowa Senator and White House economic advisor still feel China will adhere to trade deal. Brazil farmer remain slow seller of soybean. Brazil May and June soybean loading are record. Argentina lowered their soybean crush and export numbers but raised carryout.
Weekly US old crop and new soybean sales are expected near 600-1,400 mmt, corn 500-1,000 mt and wheat 150-600 mt. Weekly US ethanol data showed slight increase in production and slight drop in stocks. US gas demand is slowly increasing but still well below pre-virus use.
Managed funds were net buyers of 11,000 contracts of SRW Wheat; bought 28,000 Corn; net sold 3,000 Soybeans; bought 2,000 Soymeal, and; net sold 2,000 Soyoil. We estimate Managed Money net even contracts of SRW Wheat; net short 223,000 Corn; net long 13,000 Soybeans; net short 29,000 lots of Soymeal, and; net long 5,000 Soyoil.
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