Written Commentary
SOYBEANS
Soybean futures ended higher. SH initially traded below Tuesday low on long liquidation before USDA report. Some talk that higher US domestic basis offered support. Some also feel that in Jan, USDA could lower US 2021 crop and offset lower US exports. China import soybean demand is a pace below 100 mmt. China needs to buy 400 mt soybeans per day to reach 100 mt imports. Weekly US soybean exports are estimated near 1,000-1,700 mt versus 1,063 last week. Soymeal gained on soyoil due to firm US domestic soymeal basis and talk of lower soyoil demand and higher supplies. US soyoil exports are behind last year. EPA 2020 advanced biodiesel use was est near 4.63 bil gallons vs 15.0 in energy bill. 2021 5.2 billion vs 18.0, 2022 5.77 vs 18.0. 2023 energy bill was to be near 18.0 bil. USDA is expected to increase US 2021/22 carryout tomorrow from 1,912. Dalian soybean, soymeal, soyoil and palmoil futures were lower
CORN
Corn futures ended mixed. CH gained on both CZ and CK. For the 4th straight day, CH closed above the 20 day moving average. Most were looking for CH to remain in a 5.60-5.90 range. Drier South America weather and announcement of large US sales to Mexico offered support. Some were concerned that slow US export sales and shipment pace could force USDA to lower US exports. Increase sales to Mexico and Canada plus uncertain shipping capabilities by Ukraine offered support. Corn also found support after weekly US ethanol production was up 5 pct from last week and 10 pct from last year. Stocks were up slightly buy down 7 pct from last year. Margins remain positive. Some look for a steady but slow corn rally post USDA report due to improved demand and dry South Brazil and NE Argentina weather. Strong domestic corn basis and slowdown in farmer selling could also support futures. EPA announced 2020 total renewable fuel at 17.1 billion gals vs 30.0 in Energy bill. 2021 18.5 vs 33.0. 2022 20.7 vs 33.0. Corn base 2020 use was 12.5 bil vs 15.0 in energy bill. 2021 13.3 vs 15.0. 2022 15.0 vs 15.0. Some feel this suggest USDA should increase US corn use for ethanol 150 mil bu to 5,400.
WHEAT
Wheat traded lower on concern over a slowdown in World import needs. Some feel USDA could increase Canada and Australia wheat production on tomorrows report. This despite the fact that Russia export prices have turned higher. Russia prices are near $331 up $10. This prices suggest a new export tax near $90. Some feel there could be a steady but slow KC wheat rally post USDA report due to increase World wheat trade and tightening World exporters supply. US 2022 south plains wheat forecast is warm and dry. Some feel rains in California and snow in Rockies could suggest a higher PDO reading. The higher reading could increase the chance for a drier US Midwest summer. WH traded back below 8.00. Support 7.87. Resistance 8.20. KWH support 7.95. Resistance 8.38. MWH in 10.00-10.50 range with 10.32 the 20 day moving average. Domestic flour buyers need Q1 coverage. Still buying hand to mouth. HRW domestic basis continue to firm.
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