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Export Sales, Mixed Grains

Grain Futures Outlook

Grains are mixed. SX is up 4 cents and near 9.66. SMV is near 303.2. BOV is near 33.72. CZ is unchanged and near 3.58. WZ is unchanged and near 5.59. KWZ is unchanged and near 4.80. US stocks are higher. US Dollar is higher. Crude is lower. Gold is lower.

Chinese Ag futures (January) settled down 6 yuan in soybeans, down 7 in Corn, up 1 in Soymeal, up 94 in Soyoil, and up 88 in Palm Oil. Malaysian palm oil prices were up 62 ringgit at 2,873 (basis November) at midsession tracking strong Chinese vegoil markets.

The 6 to 10 day forecast for the US Midwest has mixed ideas from the models. Both have rains across the region Tuesday/Wednesday with the GFS keeping rains in the east through Thursday. The GFS has good rains across eastern IA into northern IL/IN and much of the lower part of MI, some heavy rains are seen for central IL. The European model sees moderate rainfall favoring the western Midwest with light rains elsewhere. Temps will be falling to below average by the weekend and the first half of next week. The 11 to 16 day outlook for the Midwest has average temps and below average precip for the region.

Weekly US corn export sales are estimated near 1,500-2,500 mt versus 1,180 last week. Trade will need to see a yield below 175 to trade higher. US farmers are unwilling to sell on concern about losing future US aid. Last year, US did not pay to early sellers. Another crop watcher estimated US soybean crop near 4,368 mil bu versus USDA 4,425 and 20/21carryut near 610.

Weekly US soybean export sales are estimated near 1,500-2,000 mt versus 1,874 last week. US soybean futures are trying to balance the size of the US crop versus China demand. Trade will need to see a yield below 51 to trade higher. Funds continue to add to their large net long. Another crop watcher estimated US corn crop near 15,005 mil bu versus USDA 15,278 and 20/21carryut near 2,895.

Weekly US wheat export sales are estimated near 350-600 mt versus 784 last week. Higher US wheat futures linked to increase money flow. US south plains, south Russia soils are dry for 2021 winter wheat seeding. Argentina is dry. EU and Russia farmer remains reluctant to sell cash.

An historical cash infusion into the US farm economy will spare farmers and ranchers from falling income from commodity sales spurred in part by the coronavirus pandemic; cash receipts for farm goods are expected to drop more than 3% this year, led by an 8% decline in receipts for broilers, cattle and calves, hogs and milk; receipts for corn, wheat, cotton, and soybeans are also expected to drop, while receipts for fruits and nuts will rise; but a record $37B in payments from the Trump administration will boost farm income, and push payments to 36% of that income, the highest share in nearly two decades.

On Tuesday Managed funds were net sellers of 6,000 contracts of SRW Wheat; bought 1,000 Corn; bought 7,000 Soybeans; net sold 1,000 lots of Soymeal, and; bought 5,000 Soyoil. We estimate Managed Money net long 25,000 contracts of SRW Wheat; short 47,000 Corn; net long 159,000 Soybeans; net long 12,000 lots of Soymeal, and; long 75,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 6,900 contracts; HRW Wheat up 1,900; Corn up 6,100; Soybeans up 7,300 contracts; Soymeal up 1,500 lots, and; Soyoil up 7,900.

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