Written Commentary
MORNING OUTLOOK
Grains are higher. SN is up 20 cents and near 16.04. SX is up 28 cents and near 14.63. SMN is near 400.8. BON is near 72,81. Overnight high was 73.74. CN is up 10 cents and near 6.93. CZ is up 16 cents and near 6.07. WN is up 8 cents and near 6.95. KWN is up 8 cents and near 6.44. MWN is up 15 cents and near 8.28. Overnight high was 8.47. Overnight grain futures gapped open higher with SN over 16.00, CN over 7.00 and WN over 7.00. Some profit taking was noted on mixed US weather forecast.
US stocks are mixed. Crude is lower.
The 2 week US Midwest forecast is warm and dry for the upper US Midwest, PNW. Canada prairies could see some rains. The extended 2 month EU weather model calls for the same type of weather. 25 pct of US soybean 2021 acres are in drought stress. 15 pct of US soybean acres are grown in the Dakotas, 10 pct of corn. USDA is expected to lower US corn rating to 75 pct G/E vs 76 last week.
On Thursday USDA will update US/World supply and demand. Most look for USDA to lower South America corn crops especially Brazil. USDA could keep South America soybean crops unch from May.
Some feel USDA could increase slightly US 2020/21 corn use and estimate 20/21 carryout 200 mil bu. They will not change US 2021 acres and yield. Some could see higher US 2021/22 demand and a carryout near 1,200 vs USDA 1,507. Informa est US 2021/22 carryout near 1,738 due to est of acres closer to 96.8 vs USDA 91.1
Some feel USDA will keep US 20/21 carryout at 120 mil bu. They will not change US 2021 acres and yield. Some could see higher US 2021/22 demand and a carryout near 110 vs USDA 140.
USDA could Increase US 2021 wheat crop but eventually a lower HRW crop could offset higher SRW.
On Friday, Managed funds were net buyers of 7,000 contracts of SRW Wheat; 27,000 corn; 22,000 soybeans; 4,000 soymeal and 11,000 soyoil. We estimate Managed Money even SRW Wheat; net long 288,000 Corn; long 161,000 Soybeans; long 17,000 Soymeal, and; net long 101,000 Soyoil.
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