Choppy Grains Market

Morning Outlook

Grains are mixed. SX is unchanged and near 10.88. SMZ is near 392.0. BOZ is near 34.42. CZ is up 3 cents and near 4.20. WZ is up 4 cents and near 6.24. KWZ is up 3 cents and near 5.55. US Dollar is mixed. US stocks are mixed to slightly higher. Crude is higher. Gold is slightly lower. There is expected to be no new US stimulus deal until after the US elections.

Chinese Ag futures (January) settled up 46 yuan in soybeans, up 3 in Corn, down 10 in Soymeal, up 82 in Soyoil, and up 88 in Palm Oil. Malaysian palm oil prices were down 8 ringgit at 3,061 (basis January) on position-evening.

Significant precipitation is still expected in West Texas and from the Texas Panhandle through Oklahoma and south-central Kansas tonight into Thursday. This will significantly increase soil moisture and be beneficial for newly planted winter crops. US Midwest 6-10 day and 8-14 day weather forecast suggest normal to above temps and normal to below rains.

Brazil has rain falling in most of the nation at one time or another, but rainfall will be least frequent and least significant in the interior south. Argentina will receive showers today and Wednesday before dry weather occurs for about a week.

Last evening GFS model run likely took away too much moisture from eastern Ukraine and western parts of Russia’s Southern Region. The bottom line should be one of improvement for poorly established winter crops in Ukraine and at least the west half of Russia’s Southern Region.

Yesterday’s U.S. weekly export inspections had Wheat exports running 4% ahead of a year ago (6% last week) with the USDA currently forecasting a 1% increase on the year, Corn 75% ahead of a year ago (up 77% last week) with the USDA up 32% for the season and Soybeans are up 78% on the year (up 77% last week) with the USDA having a 26% increase forecasted on the year

USDA estimated us corn harvest at 72 pct versus 60 last week, 56 average and 38 last year. US farmer is selling some corn but a higher pct than normal is going to storage. US corn export and domestic market needs to buy more corn. Commercial are still looking at higher demand for US corn exports than USDA guess and well above last year. USDA estimate of Ukraine corn crop could be 6 mmt to high. US fob corn price is near $229 vs Ukraine $243. EU needs to find 18-20 mmt feed grain imports. What will China demand for global/US corn be?

On Monday, US wheat futures dropped on improving global weather. This despite higher World wheat prices. 85 pct of US winter wheat crop is planted. USDA estimated that 41 pct of the US 2021 winter wheat crop was rated good/ex. This was well below the trade guess and last year. Kansas is 29. OK is rated only 11 pct good. TX is 37 G/E. CO is 24. MO IS 49. MI is 71. OH is 68. IL is 68. WA is 73. EU wheat plantings jumped 33 pct to 45 pct planted versus 27 last year.

SX is getting closer to 11.00. China has not bought US soybeans for 2 weeks. SMZ is over 392. Next upside objective could be 400. BOZ is over 34. Some feel BOZ could trend higher due to higher World vegoil prices led by palmoil and sunoil. Tight old crop supplies has Brazil out of the soybean, soymeal and soyoil market. Brazil fob soybean price is near $510 vs US $462.

On Monday, Managed funds were net sellers of 9,000 SRW Wheat; sold 4,000 Corn; bought 4,000 Soybeans; bought 2,000 Soymeal, and; net bought 3,000 Soyoil. We estimate Managed Money net long 42,000 contracts of SRW Wheat; long 249,000 Corn; net long 253,000 Soybeans; net long 96,000 lots of Soymeal, and; long 90,000 Soyoil.

Preliminary Open Interest saw Corn up 16,400; Soybeans down 10,300 contracts; and; Soyoil up 5,400.

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