January 31, 2021 by Steve Freed VP Grain Research
Grain calls are higher. SH is up 14 near 13.70. SMH is near 431.6. BOH is near 44.62. CH is near 5.47. WH is near 6.63. KWH is near 6.38. CRB Commodity Index traded higher last week led by gains in grains, energy and metals. In general, commodity prices firmed on talk of a new US stimulus package and hopes increase vaccinations will rebound US economy. Talk that US debt could exceed $30 trillion on Q2 could weigh on US Dollar.
Most bulls still feel higher China demand for US corn could tighten US 2020/21 corn carryout and push nearby futures closer to 6.00. Some thoughts will now turn to USDA Feb 9 report. Will USDA drop South America crops and increase US export demand? Some analyst look for final US exports closer to 2,900 mil bu versus USDA 2,550. This and an increase in domestic demand near 200 mil bu could drop US carryout close to 1,050 mil bu versus USDA 1,552. Last week China bought 243 mil bu US corn and some feel they also bought an additional 80 mil bu.
Most bulls still feel higher demand for US soybean and soymeal could tighten US 2020/21 soybean carryout and push nearby futures closer to 16.00. Some thoughts will now turn to USDA Feb 9 report. Will USDA drop South America crops and increase US export demand? Some analyst look for final US exports closer to 2,275 mil bu versus USDA 2,230. This and an increase in crush could drop US carryout close to 100 mil bu versus USDA 140. Some feel China continues to buy US old crop and new crop soybeans. US soymeal exports are 2nd highest on record.
Wheat futures traded higher following corn. Talk of higher Russia export taxes and lower exports offered support. Russia is now considering and 70 pct export tax after June 1 on actual prices versus $200. Talk of lower US and Russia 2021 crops, some increase in US export demand and Argentina export restrictions and slower EU exports should also support prices.
On Friday, Managed funds were net buyers 0f 13,000 SRW Wheat; bought 35,000 Corn; net 13,000 Soybeans; 3,000 lots of Soymeal, and; net bought 1,000 Soyoil. CFTC estimated Managed Money net long 21,000SRW Wheat; long 364,000 Corn; net long 156,000 Soybeans; net long 74,000 lots of Soymeal, and; long 107,000 Soyoil. We estimate Managed Money net long 19,00 SRW Wheat; long 404,000 Corn; net long 163,000 Soybeans; net long 72,000 lots of Soymeal, and; long 112,000 Soyoil.