Soybeans Are Sharply Higher

MORNING OUTLOOK

Grains are higher. Soybeans are sharply higher. SH is up 20 cents near 13.34. SMH is near 427.0. BOH is near 42.92. CH is up 3 cents and near 4.86. WH is up 9 cents and near 6.51. KWH is up 6 cents and near 6.06. Need to slow demand due to tightening US 2020/21 corn and soybean balance sheets may be pushing prices higher.  US stocks are marginally higher. US Dollar is lower, Crude is higher. Gold and copper are higher. Balance of power in US Congress could be decided today in Georgia Senate race.

Chinese Ag futures (May) settled down 29 yuan in soybeans, down 1 in Corn, down 29 in Soymeal, down 44 in Soyoil, and down 36 in Palm Oil. Malaysian palm oil prices were up 32 ringgit at 3,756 (basis March) supported on supply concerns.

In Brazil, conditions will continue to be mostly favorable for crop development. South Brazil could be dry. In Argentina, a pattern of erratic rainfall will continue.

On Jan 12, USDA will revise US/World supply and demand, estimate US Dec 1 corn , soybean and wheat stocks, estimate final US 2020 row crop production and their first guess of US 2021 winter wheat acres. Informa will be out today with revised estimates for 2021 US crops.

Trade estimates US 2020/21 corn carryout near 1,380 mil bu vs USDA 1,702. Doubt USDA will drop South America corn crop, China corn crop or increase US exports as much as the trade. Trade also looks for US final 2020 corn crop near 14,450 versus USDA 14,507. Dec 1 US corn stocks could be near 12,000 mil bu vs 11,327 last year. Some estimate Brazil+Argentina corn crop near 147 mmt versus USDA 159.

Trade estimates US 2020/21 soybean carryout near 100 mil bu vs USDA 175. Doubt USDA will drop South America soybean crop, increase China soybean imports or increase US exports/crush as much as the trade. Trade also looks for US final 2020 soybean crop near 4,150 versus USDA 4,170. Dec 1 US soybean stocks could be near 2,800 mil bu vs 3,252 last year. Some estimate Brazil+Argentina soybean crop near 174 mmt versus USDA 183. Soybean board crush margins continue to fall.

USDA rated 2021 KS wheat crop 46 pct good/ex vs 33 in Nov and 40 last year. CO was 19 vs 20 in Nov and 57 last year. IL was 50 versus 79 in Nov and 48 last year. SD was 37 vs 57 in Nov and 73 ly. Trade estimates US Dec 1 wheat stocks near 1,685 mil bu vs 1,841 last year. Trade estimates US 2021 winter wheat acres near 31.9 mil vs 30.4 ly, HRW 22.4 vs 21.3, SRW 6.2 vs 5.5 and white winter 3.4 vs 3.5 ly.

On Monday, Managed funds were net buyers of 2,000 wheat, net even corn, bought 5,000 soybeans, sold 5,000 lots of Soymeal, and; sold 2,000 lots of Soyoil. We estimate Managed Money net long 36,000 contracts of SRW Wheat; long 357,000 Corn; net long 222,000 Soybeans; net long 91,000 lots of Soymeal, and; long 116,000 Soyoil. CFTC estimated Managed Money net long 13,000 contracts of SRW Wheat; long 332,000 Corn; net long 196,000 Soybeans; net long 89,000 lots of Soymeal, and; long 113,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 3,200 contracts; HRW Wheat up 1,200; Corn up 19,600; Soybeans up 27,200 contracts; Soymeal up 1,400 lots, and; Soyoil down 2,000.

 

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