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Ag Market View for Jan 21

Grains were mixed. Soybeans, soymeal and wheat traded lower. Soyoil and corn traded higher. US Dollar was lower. Crude was lower. US stocks were slightly lower and waiting for POTUS next move.

SOYBEANS

Soybeans were mixed. Market continues to consolidate after recent losses. Some feel drop from last weeks high was liquidation of large China spec longs due to margin calls. USDA announced 136 mt US soybeans to China and 163 mt US soybean to Mexico. Weekly US soybean export sales are estimated near 750-1,500 mt versus 908 last week. New crop could be 350-600 mt versus 326 last week. US soymeal sales could be 100-400 mt versus 326 last week. Informa estimated US 2021 soybean planted acreage at 90.0 million versus 83.1 last year and 76.1 in 2019. They are using a trend yield of 52.0 versus 50.7 last year and 47.4 in 2019. This suggest a crop of 4,638 mil bu. Recent rains across South American growing areas that have resulted in upward revisions in some analyst’s estimates for Brazil’s soybean production to 133.0-135.6 mmt have started to provide overhead resistance for the soybean market. Palmoil prices were higher on concern about Malaysia and Indonesia flooding. Informa estimates Q1 and Q2 soybean futures to average near 14.30. Assuming normal US 2021 weather, fall prices near 11.40. They estimate soymeal futures near 465 with fall low near 390.

CORN

Corn futures chopped around. Market continues to consolidate are recent losses. Fact nearby corn futures gained on new crop suggest corn futures may not be high enough to ration demand. Informa estimated US 2021 corn planted acreage at 94.2 versus 91.7 million previous and 91.0 last year and 89.7 in 2019. This increase was probably justified They are using a trend yield of 181.0 versus 175.8 last year and 167.5 in 2019. This suggest a crop of 15,658 mil bu. Informa estimates Q1 and Q2 corn futures to average near 5.35 with fall low near 4.85. The cattle on feed report will be released tomorrow. Cattle on feed on January 1 are estimated at 99.4% of year ago levels, placements at 97% and marketings at 100.6% of year ago levels. The weekly EIA Petroleum Status report will be released tomorrow. Weekly ethanol production is expected to down slightly from last weeks with another build in ethanol stocks expected from last week. Weekly US corn export sales are estimated near 600-1,200 mt versus 1,437 last week. NOAA est US Feb weather warm with rains in east Midwest. Feb-Apr weather warm, dry southwest rains in east Midwest. One forecaster suggest La Nina influenced US 2021 summer weather could be warmer than normal.

       

WHEAT

Wheat futures traded lower. Word that Russia will not limit wheat exports offered resistance. Russia will impose a 50 euro tax ($1.65 per bu) om wheat export prices after March 1. A 25 euro tax will be imposed Feb 15. So far the threat of export taxes have not dropped domestic prices the 10 pct that Putin desires. This could still leave the door open for restrictions on exports. Informa estimated US 2021 wheat planted acreage of 45.3 million versus 44.3 last year and 45.0 in 2019. They are using a trend yield of 45.3 versus 44.3 last year and 52.0 in 2019. This suggest a crop of 1,902 mil bu. Informa estimates Q1 and Q2 Chicago wheat could average near 6.70 with new crop low near 6.00. KC wheat average 6.55 with new crop low near 5.75.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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