Grains Continue Higher Trend
Grains are higher. SH is up 9 cents and near 14.14. SMH is near 463.1 BOH is near 41.57. CH is up 1 cent and near 5.25. WH is up 1 cent and near 6.62. KWH is up 3 cents and near 6.29. US stocks are higher. POTUS was impeached for 2nd time. US Dollar is lower. Crude is higher. Gold is lower. Copper is higher.
Chinese Ag futures (May) settled down 176 yuan in soybeans, down 37 in Corn, up 6 in Soymeal, down 166 in Soyoil, and down 148 in Palm Oil. Malaysian palm oil prices were down 78 ringgit at 3,614 (basis March) at midsession.
In Brazil, conditions will continue to be very good in most areas. Some pockets of the far south may become a too dry. In Argentina, central and northern production areas of the nation will then receive rain Friday and Saturday. This rain is still important due to the lengthy period of dryness that will follow it.
China imported 7.5 mmt soybean in Dec. 2020 imports were 100.3 mmt. Asian markets are lower led by palmoil. Palmoil prices are down $75 in 6 days .Some sight lower India and China demand triggering the lower trade. China announced corn deficit is near 28.5 mmt. Some feel imports will be closer to 22-25 mmt versus USDA 17.5. Argentina corn crop is est near 42 mmt versus USDA 47.5. Brazil corn crop is est near 102 mmt versus USDA 109.
Yesterday Conab est Brazil soybean crop near 13 mmt. Most are in the range of 128-129. La Nina could keep south Brazil dry and central Brazil soils are drier than normal. Argentina soybean crop is est near 44 mmt versus USDA 48. USDA est US combined corn, soybean and wheat exports at a record 152 mmt. Some feel final exports could be closer to 161 mmt. Weekly US corn export sales are est near 700-1,200 mt, soybean 400-700 mt and wheat 240-500 mt. US NOPA Dec soybean crush should be a record 185.2 mil bu.
Wheat prices dropped led by Chicago. MLS traded over KC and KC continues to narrow the gap between Chicago. Paris wheat futures made new 8 year highs. Russia Ag Minister announced the 25 dollar export tax will be from Feb 15 to March 15. Then a 45 dollar tax will go into effect until June 30. There will be no new crop export tax. Question will this be enough to insure a domestic supply and will Russian farmer sell wheat and absorb the tax. Wheat prices may depend upon Russia export pace and price movement.
Some still feel that CH resistance starts at 5.50 and prices could test 6.00 if South America supply is lower and US export demand is higher. Some feel drop in South America soybean supplies, record China soybean import demand and record US soybean crush rate will drop US supplies and force SH to test 15.30. Some feel Russia uncertainty will help push WH over 7.00.
On Tuesday, Managed funds were net sellers of 4,000 SRW Wheat; bought 20,000 Corn; net sold 8,000 Soybeans; sold 5,000 lots of Soymeal, and; sold 2,000 lots of Soyoil. We estimate Managed Money net long 32,000 contracts of SRW Wheat; long 398,000 Corn; net long 218,000 Soybeans; net long 104,000 lots of Soymeal, and; long 105,000 Soyoil.
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.