Grains Higher on Friendly USDA Report
Grains are higher. SX up 2 cents and near 10.67. SMZ is near 363.7. BOZ is near 34.13. CZ is up 3 cents and near 3.98. WZ is up 2 cents and near 5.96. KWZ is up 3 cents and near 5.39. Some feel overnight, rest of the World was able to trade the friendly USDA report. Some new grain longs are also hoping for additional China buying of US Ag goods. US stocks are mixed. US Dollar is higher. Crude is lower. Gold is higher. Last week money was investing in hard assets if there is a change in Washington leadership and if there is a vaccine against Covid. US Banks are closed today for Holiday.
For the week, SRW Wheat prices were up roughly 20 cents; HRW up 26; HRS up 12; Corn was up 16 cents; Soybeans up 45; Soymeal up $9.00, and; Soyoil up 235 points. Crushing margins were up 7 cents at $1.08; Oil share was unchanged at 31%.
Chinese Ag futures (January) settled up 64 yuan in soybeans, up 24 in Corn, up 21 in Soymeal, up 148 in Soyoil, and up 188 in Palm Oil. Malaysian palm oil prices were up 87 ringgit at 2,998 (basis December) on tighter stock data.
The US Southern Plains over the 6 to 10 day period has little to no rains over the 6 to 10 day period. Temps are above average for most of the week before falling to below average for the upcoming weekend and early next week.
The Brazilian growing regions has hit and miss showers for the week ahead in central north with up to 70% coverage. Rains central/south look to be light with 75% coverage. The 6 to 10 day has rainfall continuing in the north with around 80% coverage. The Argentine growing regions has rainfall this week in the northeast this week with the rest of the growing areas dry. The 6 to 10 day has light to moderate rainfall with coverage up to 90%.
Central and Eastern Europe rainfall will be abundant to excessive this week. There is some potential for increased shower activity in eastern Ukraine and a part of Russia’s Southern Region during the October 18-25 period.
Most private analyst tend to agree with USDA estimate of US 2020 corn and soybean crop. Range of guesses for US 2020/21 corn carryout ranges from 1,855 mil bu to 2,255 versus USDA 2,167. The difference is exports. One group estimates US corn exports closer to 2,550 mil bu versus USDA 2,325. China could take 500 mil bu of US corn versus 80 last year.
Range of guesses for US 2020/21 soybean carryout ranges from 170 mil bu to 269 versus USDA 290. The difference is exports. One group estimates US soybean exports closer to 2,350 mil bu versus USDA 2,200. China could take 1,323 mil bu of US soybeans versus 582 last year.
One group released their first guess of US 2021/22 corn, soybean and wheat supply and demand. The US 2021 corn crop is estimated at 15,600 mil bu with acres near 93.7 versus 91.0 in 2020. Corn carryout is estimated near 2,440 versus 2,167 this year. US 2021 soybean crop is estimated at 4,480 mil bu with acres near 87.1 versus 83.1 in 2020. Soybean carryout is estimated near 200 versus 290 this year. US 2021 wheat crop is est at 1.960 mil bu with acres near 45.4 versus 44.3 in 2020. Wheat carryout is estimated near 935 versus 883 this year.
On USDA Friday, funds were net sellers of 2,000 contracts of SRW Wheat; net bought 40,000 Corn; net bought 15,000 Soybeans; bought 3,000 Soymeal, and; net bought 9,000 Soyoil. We estimate Managed Money net long 29,000 contracts of SRW Wheat; long 184,000 Corn; net long 258,000 Soybeans; net long 85,000 lots of Soymeal, and; long 88,000 Soyoil.
Preliminary Open Interest saw SRW Wheat futures up roughly 2,900 contracts; HRW Wheat down 1,300; Corn up 16,500; Soybeans up 27,600 contracts; Soymeal up 5,800 lots, and; Soyoil up 6,800.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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.