Written Commentary
The Ghost in the Machine Q1 2024
March 19, 2024
Grains Lower With Soybeans Sharply Lower
- January 20, 2021
- Steve Freed
- Follow us on Twitter @ADMISI_Ltd
MORNING OUTLOOK
Grains are lower. SH is down 24 cents and near 13.61. SMH is near 441.5. BOH is near 41.70. CH is down 10 cents and near 5.15. WH is down 10 cents and near 6.62. KWH is down 6 cents and near 6.38. US stocks are higher. US Dollar is mixed. Crude is higher. Gold is higher. US Inauguration today. There is talk the new administration will increase spending, market regulations and reach out to improve global relations. New administration will also turn more environment friendly.
For the second day, soybean futures are seeing steep losses. Some would blame improve South America weather. Other feel market was due for a correction given it severe overbought position. Last weeks SH high was 14.36 and SMH was 471. 20 day moving average is near 13.37 SH and 435 SMH. Numbers are still the same. US export and crush demand is not being rationed, South America crops are late and could be below USDA last estimates, China is still a buyer of US Feb soybean but is starting to buy Brazil new crop. Weak longs will exit chart action. At one point, record demand for US soybeans will offer support and retest recent highs.
Also for the second day, corn futures are seeing steep losses. Some would blame improve South America weather. Other feel market was due for a correction given it severe overbought position. Last weeks CH high was 5.41. 20 day moving average is near 4.88 CH. Numbers are still the same. US corn export prices are the lowest in the World and demand is not being rationed, South America crops are late and could be below USDA last estimates. Weak longs will exit chart action. At one point, record demand for US corn and need for increase US 2021 acres will offer support and retest recent highs.
Wheat futures are also lower. Recent rally in prices was linked to talk of lower Russia and EU exports and a tax on future Russia exports. This has not changed, Wheat appears to be following lower corn and soybean price actions. It is hard to define Black Sea wheat export prices and ultimately Russia export numbers. Most feel Canada and Australia may be sold out until April. This leaves buyers little options for buying wheat. Last weeks WH high was 6.93. 20 day moving average is near 6.43 WH.
On Tuesday, Managed funds were net sellers of 2,000 SRW Wheat; sold 25,000 Corn; net sold 20,000 Soybeans; sold 5,000 lots of Soymeal, and; net even in Soyoil. We estimate Managed Money net long 21,000 contracts of SRW Wheat; long 389,000 Corn; net long 144,000 Soybeans; net long 79,000 lots of Soymeal, and; long 85,000 Soyoil.
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