Calls are steady to lower
This weeks forecast is for improving to stable conditions with .5-2.0 (3.0 isolated) with good potential coverage in Argentina. But if they do not get the rain this week , they will be in trouble as it gets drier and hotter the following week.
Brazil is favorable
USDA Report Tuesday could result in any direction. There are 3 main reports Stocks, production, S/D. Trade estimates would be supportive to bullish but we have to also have weather feeding the bull.
Political tension could also increase this week which may be negative on risk off exiting of positions but we all know food and fuel are bullish commodities when there are problems.
Read Matts comments on our web site We added to hedges and making sure the upside is open.
Below is ADMIS take:
January 10, 2021 by Steve Freed VP Grain Research
Grain calls are mixed. SH is near 13.74. SMH is near 439.6. BOH is near 43.59. CH is near 4.96. WH is near 6.38. KWH is near 5.94. USDA report could increase grain price volatility this week. Scattered rains in South America this week could also limit new buying. US stocks are near 31,097. US Dollar is near 90. Crude is 52. Gold is near 1850.
GSI commodity Index made a new high for the move on talk of a new US stimulus deal and potentially new infrastructure deal. Talk of new money coming into commodities due to talk of increase inflation is helping commodity prices and hurting bonds. Talk of higher US debt could push US Dollar lower.
US corn prices traded higher last week and at new 7 year highs. Lack of farmer selling and talk of lower US 2020/21 carryout is supportive. Some feel continued dryness across parts of Brazil and Argentina and higher US corn exports could push CH close to 5.20-5.40. Dry US spring could push CK closer to 5.50-6.00. Some analyst look for US corn carryout to be closer to 1,400 mil bu vs USDA 1,702. This due to 200 mil bu more exports and 100 mil bu more ethanol.
US soybean prices traded higher last week and at new 7 year highs. Talk of lower US 2020/21 carryout is supportive. Some feel continued dryness across parts of Brazil and Argentina and higher US soybean exports could push SH close to 15.00. Dry US spring could push SK closer 16.00. Some analyst look for US soybean carryout to be closer to 100 mil bu vs USDA 175. This due to 75 mil bu more exports. Mondays US exports could be near 66-75 mil bu.
Wheat futures drifted lower last week on lack of new news and slow US export demand. World wheat prices though are higher led by Black Sea and Matif. Talk of lower Russia and EU exportable supplies and lack of Russia farmer selling is supportive. Talk of higher corn prices could support higher wheat prices. Concern about US and Russia 2021 wheat crops is also supportive.
On Friday, Managed funds were net sellers of 3,000 SRW Wheat and 2,000 soyoil; net buyers of 15,000 Soybeans; 7,000 lots of Soymeal, and; 5,000 corn. CFTC estimated Managed Money net long 25,000 contracts of SRW Wheat (+12,000); long 350,000 Corn (+18,000); net long 175,000 Soybeans (-21,000); net long 84,000 lots of Soymeal (-5,000), and; long 113,000 Soyoil (unch). Managed fund soybean long was lower than expected. Some feel increase soybean buying could be linked to China OTC to hedge new sales. We estimate Managed Money net long 12,000 contracts of SRW Wheat ; long 362,000 Corn; net long 191,000 Soybeans; net long 92,000 lots of Soymeal, and; long 112,000 soyoil. Managed fund long is near record large.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. AgMarket.Net® is the Farm Division of John Stewart and Associates (JSA) based out of St Joe, MO and all futures and options trades are cleared through ADMIS in Chicago IL. This material has been prepared by an agent of JSA or a third party and is, or is in the nature of, a solicitation. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading information and advice is based on information taken from 3rd party sources that are believed to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.
The services provided by JSA may not be available in all jurisdictions. It is possible that the country in which you are a resident prohibits us from opening and maintaining an account for you. 2021