Written Commentary
SOYBEANS
Soybeans, soymeal, soyoil and corn traded higher. US Dollar was moderately higher. Crude was higher. Soybeans tried to rebound off Thursdays lows on talk of tightening US old crop supply. Increase China demand for US corn offered support to soybeans. World Oct-Feb soybean and soymeal trade was a record 62.9 mmt vs 60.7 last year. US soybean exports were near 46.6 mmt vs 26.4 ly. US soymeal exports were near 5.7 mmt vs 5.2 last year. Brazil soybean exports were near 6.6 mmt vs 19.4 last year. Argentina soymeal exports were near 9.5 mmt vs 10.8 ly. Some of Thursdays selling was linked to fact US and China talks started off poorly with each side accusing the other of poor policies. USDA Ag attaché estimated China soybean imports near 99 mmt and next year 100 mmt. Spread of ASF has raised concern about lower soybean imports. USDA March 1 stocks report is March 31. Over last 16 years, 8 times USDA number has been above trade guess by an average of 46 mil bu. 8 times USDA was below trade guess by an average of 24 mil bu.
Weekly nearby soybean futures chart
CORN
Corn futures traded higher. Trade took all of Thursdays losses back today on additional news that China continued to buy US corn. USDA announced another 800 mt of US corn was sold to China. This brings this week’s total to almost 4 mmt or 157 mil bu. This could force USDA to increase US exports, lower US corn carryout and increase China corn imports. Some feel adding what China has bought from Ukraine and Brazil, China imports could be near 32-34 mmt versus USDA guess of 24. This has some lowering their est of US 2020/21 corn carryout now below 1,000 mil bu versus USDA 1,502. This makes USDA estimate of March 1 stocks key to basis, spreads and futures direction. Over the last 16 years, USDA estimate of March 1 stocks has been above the average trade guess 10 times at an average of 140 mil USDA number has been below the trade guess 6 times also at an average of 140 mil bu. USDA does not count corn in transit. 300-600 mil bu of corn stocks has been floating around either above or below the average guess since ethanol has been a large part of total demand. Argentina corn crop is now rated 22 pct G/E vs 17 last week and 35 last year. Argentina est the corn crop near 45 mmt vs USDA 47.5.
July corn futures minus December corn futures spread
WHEAT
Wheat traded lower but off session lows. Good rains across US winter wheat areas and continued slow demand for US wheat export offered resistance to Thursdays lows. Higher US corn trade offered support. Lack of transparency concerning Russia export policy and World 2021 wheat crop size offered seasonal support. Dry weather across US north plains could offer support. Key could also be Russia and EU 2021 wheat supplies. This week’s NOAA US 30-day outlook calls for above normal temps and normal rains in east and SE and below normal rains in west and SW. 90 day calls for above normal temps and below normal rains in south US. This could stress US HRW and HRS crops. USDA March 1 wheat stocks report is March 31. Over the last 16 years, USDA estimate of March 1 wheat stocks has been above the average trade guess 7 times at an average of 33 mil bu. USDA number has been below the trade guess 9 times at an average of 15 mil bu. Talk of increase US and global wheat feeding is offering support
Kansas City May wheat futures minus Chicago May corn futures spread
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