Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Grains Lower Linked to Better Weekend Rains
- May 10, 2021
- Steve Freed
- Follow us on Twitter @ADMISI_Ltd
MORNING OUTLOOK
Grains are lower. SN is down 5 cents and near 15.84. SX is down 10 cents and near 14.22. SMN is near 439.6. BON is near 63.94. CN is down 6 cents and near 7.26. CZ is down 13 cents and near 6.23. WN is down 10 cents and near 7.51. KWN is down 10 cents and near 7.26. MWN is down 13 cents and near 7.83.
US stocks are mixed. Crude is higher. East Europe hackers shutdown US Colonial pipeline. Copper is higher. Goldman called commodity “Goldilocks”. Not to hot not to cold and could last longer especially if Fed is slow to react. China iron ore higher on increase steel demand.
Chinese Ag futures for (September) settled up 62 yuan in soybeans (at U.S. $26.00), up 32 in Corn (at $11.20), down 35 in Soymeal (at $520), down 14 in Soyoil (at 63.05 cents), and up 32 in Palm Oil. Malaysian palm oil prices were down 78 at 4,349 (basis July) at midsession still correcting gains after prices had best week in two decades. Malaysian palm oil exports for May 1-10 rose 29 pct.
Lower call linked to better SD/IA/IL weekend rains. Brazil is still dry. Money is buying hard assets (grains). US 7 day rains in south Delta. 6-10 days warm with normal rains. 8-14 warm with normal rains. Brazil is to see temporary rains but the amount for key Safrinha corn country will be very low.
This week trade is all about traders evening up for USDA critical May report.
Trade est US 2020/21 corn carryout at 1,275 vs 1,352, beans 118 vs 120 and wheat 850 vs 852
Trade est US 2021 corn crop near 15,029, soybeans 4,431 and all wheat 1,912
Trade est US 2021/22 corn carryout at 1,327, soybean 133 and wheat 751.
Private analyst est US 2021/22 corn carryout at 1,009, beans 108 and wheat 719.
Key will be Brazil corn crop est, China corn imports and US 2020/21 corn and soybean demand. April World soybean exports reached a record 19.4 mmt, up 1.0 mmt from a year earlier. Fund bullishness toward grains and oilseeds near record levels as global demand exceeds supplies. Grain and oilseed futures overbought with US summer weather key to final price action.
On Friday, Managed funds were net buyers of 4,000 contracts of SRW Wheat; bought 10,000 in Corn; bought 11,000 Soybeans; net bought 10,000 Soymeal, and; bought 2,000 in Soyoil. We estimate Managed Money net long 31,000 contracts of SRW Wheat; net long 402,000 Corn; long 204,000 Soybeans; long 80,000 Soymeal, and; net long 193,000 Soyoil.
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