Turnaround Tuesday, Grains Mostly Lower
Turnaround Tuesday? Grains are mostly lower. SH is down 2 cents and near 12.45. SMH is near 409.4. BOH is near 39.69. CH is unchanged and near 4.39. WH is down 6 cents and near 6.04. KWH is down 10 cents and near 5.63. US has agreed to a new stimulus package. Trade still watching new news on new UK virus and success of vaccines. US stocks are mixed. US Dollar is higher. Crude, gold and copper are lower. CBOT grain trading will close early Thursday and be closed Friday for Holiday.
Chinese Ag futures (May) settled up 115 yuan in soybeans, up 6 in Corn, up 72 in Soymeal, down 78 in Soyoil, and down 74 in Palm Oil. Malaysian palm oil prices were up 10 ringgit at 3,416 (basis March) despite talk of export duties in January.
A few more showers should be thrown into Argentina’s forecast for next week, but no generalized rain is likely. Overall, Argentina will continue on a ten-day bout of restricted precipitation and rising crop stress (except in the far west). Brazil crop weather will remain good form center west to center south through the next couple of weeks with net drying in the far south and in a few far northeastern crop areas.
There is talk that China has bought a few US Feb and maybe March soybean cargoes. There is also talk that Brazil has now soybean in their export line up and shipped only 90 mmt in Dec. Last year Dec exports were near 2 mmt with 1 mmt in the export lineup. 100 vessels are delayed shipment in Argentina including 1.5 mmt soymeal and 500 mt soyoil with dry weather lower their 2021 crop. All of this could add to demand for US soybean and soymeal exports. Asian vegoil prices are trading lower.
Corn futures are holding near recent highs. Talk of lower South America 2021 crops could add to US corn export demand and lower carryout. Some estimate that South America corn crop could be 10-15 mmt below USDA last guess. 100 vessels are delayed shipment in Argentina including 900 mt corn. There is also some that feel corn futures, basis and spreads may need to push higher to reflect the tighter US 2020/21 balance sheet and encourage US farmers to increase 2021 planted acres.
Wheat futures are lower today. Higher US Dollar and low weekly US wheat exports offers resistance. There remains concern about Russia 2021 export policy and crop size. Still that has yet translated into new US export demand. 100 vessels are delayed shipment in Argentina including 1.0 mmt wheat. Dry US south plains soils could also support prices. EU wheat export to date are ahead of USDA goal and some feel needs to slow. World buyers are uncovered for Q1 2021. Both EU and Russia farmers are not selling supplies in front of Russia Feb wheat export tax.
On Monday, Managed funds were net buyers of 2,000 SRW wheat, 8,000 corn, 17,000 soybeans, 6,000 soymeal and sold 1,000 soyoil. We estimate Managed Money net long 31,000 contracts of SRW Wheat; long 313,000 Corn; net long 239,000 Soybeans; net long 98,000 lots of Soymeal, and; long 106,000 Soyoil.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.