Grains Sharply Lower

Morning Outlook

Grains are lower. SF is down 9 cents and near 11.82. SMF is near 392.3. BOF is near 37.63. CZ is down 9 cents and near 4.17. CH21 is near 4.24. WH21 is down 3 cents and near 6.00. KWH21 is down 5 cents and near 5.55. Technically, corn, soyoil and soybean futures may be overbought. US stocks are higher. US Dollar is lower. Crude is higher. Gold is lower. Vaccine news lifting equities and energy and markets.

Corn futures are down due to talk Brazil is now offering Jan corn for exports. Lack of soybean supplies for export is now allowing for corn exports. Month end, pre-holiday and per first notice liquidation is also offering resistance. Word that China may wash out US soybean export sales and even switch open unshipped sales to Brazil is also weighing on prices. One weather map added rans to parts of Brazil and Argentina. US, SA and Black Sea farmers have stopped selling for the rest of this year.

Soybean futures are down due to talk China will wash out open US sales and could switch some sales to Brazil. Despite talk of expanding hog numbers, China crush margins have turned negative and soymeal demand has slowed. Large volume of soybean imports to arrive is also weighing on margins. Fact one weather map is adding rains for parts of Brazil and Argentina is also offering resistance to futures. Asian vegoil prices are lower on talk of lower palmoil exports and lower India demand.

Wheat future are following lower corn prices. Lower US Dollar and talk of a 2021 vaccine could offering support. Russia wheat areas are seeing snow and less colder temps. Winter wheat stands though are below normal. Russia is struggling finding new export demand due to high export prices but Russia farmer is still not selling. Domestic Russia wheat/flour prices remain record high. US winter wheat crop ratings dropped to 43 pct good/ex versus 46 last week and 47 expected.

On Monday, Managed funds were buyers of 4,000 contracts of SRW Wheat, 12,000 Corn; bought 8,000 Soybeans, 1,000 soymeal and 1,000 lots of soyoil. We estimate the funds are net long 20,000 wheat, 282,000 corn, 223,000 soybeans, 106,000 soymeal and 91,000 soyoil.

 

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