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New Money Coming Into Grains

Morning Outlook

Grains are higher. SF is up 11 cents and near 11.89. SMF is near 396.2. BOF is near 38.67. CZ is up 5 cents and near 4.27. CH21 is near 4.32. WZ is up 2 cents and near 5.94. WH21 is near 6.00. KWZ is up 1 cent and near 5.50. KWH21 is near 558. There is talk that new money may be coming into our markets due to tighten US 2020/21 corn and soybean balance sheets. Also forecast of higher soyoil prices.

Soybean prices are higher overnight. 29 percent of the Argentina soybean crop is planted. This is near average. The estimate their crop at 46.5 mmt versus USDA 51.0. Farmer selling remains less the normal. 70 pct of the Brazil soybean crop is planted. This is also near normal. Brazil famer is also not selling. Brazil Feb soybean export prices dropped. US soybean export commit is well above normal percent of USDA export goal. That and record 2 month US soybean crush suggest USDA estimate of US 2020/21 carryout is too high. Palmoil prices are lower on lower exports. Still, rally in World vegoil prices has helped support the rally is soyoil futures.

Corn futures are higher. Argentina corn plantings are on hold at 31 pct. Crop is rated 31pct good/ex versus 47 last year. Crop is estimated near 47.0 vs USDA 50.0. Brazil corn plantings are also delayed and farmer may be forced to plant earlier maturing lower yielding varieties on remaining unplanted acres. USDA estimate of US corn exports and China imports may be low. Market watching Russia and Ukraine for possible corn export quotas.

Wheat futures prices a function of World weather and Black Sea exports. Talk of rains over the next 2 weeks across the US south plains offers resistance. Russia farmer/commercial selling increased on talk that domestic prices could drop if government imposes and export tax or quota. Russia export quota could help US futures. Russia weather is turning colder which raises the risk of winterkill.

On Thursday, Managed funds were sellers of 4,000 contracts of SRW Wheat and 12,000 Corn; bought 3,000 Soybeans, 2,000 soymeal and  2,000 lots of Soyoil. We estimate Managed Money net long 20,000 contracts of SRW Wheat; long 254,000 Corn; net long 260,000 Soybeans; net long 86,000 lots of Soymeal, and; long 117,000 Soyoil.


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