Written Commentary
MORNING OUTLOOK
What a week. Grains are higher. SH is up 10 cents and near 15.54. SMH is near 434.7. BOH is near 66.22. CH is up 5 cents and near 6.22. WH is up 7 cents and near 7.59. KWH is up 9 cents and near 7.76. MWH is up 6 cents and near 9.07.
US stocks are higher. US Dollar is lower. Crude (91.73), gold, silver, copper, cocoa, sugar and cotton are higher. Risk back on? US Omicron cases coming down? US jobs data today.
Corn futures are trying to rebound from news that US Ag attaché lowered the estimate of China corn imports to 20 mmt from 26, big increase in US ethanol stocks and drop in margins and USDA announcement that China cancelled 380 mt US corn. No new news today about the cancellation but some say either it was a mistake or buyer needs the vessels for soybeans. Word is that China could be in next week for US corn. Trade estimates SA corn crop down 4 mmt from USDA Jan number versus some analyst drop of 15 mmt. Trade estimates US 2021/22 corn carryout near 1,512 mil bu vs USDA 1,540.
Soybean futures are also higher on continued talk of lower SA crops and higher demand for US soybeans. SH started the week near 14.73 and tested a high near 15.64. SMH tested a new high at 447.8. BOH tested a new high near 66.92. Estimates for the Brazil soybean crop are as low as 125 mmt vs USDA 139, Argentina 40 vs USDA 46.5 and Paraguay 6 vs USDA 8.5. A drop of 22 mmt should increase demand for US soybeans and push futures even higher. China is said the buy US soybeans over last few days. Trade est US soybean carryout at 310 vs USDA 350. S Brazil, N Argentina and Paraguay weather forecast is warm and dry. N/C/E Brazil forecast continues to be wet, slowing harvest and farmer selling. Record amount of Brazil soybean vessels are waiting to load.
Wheat is also trying to rebound. Lower US Dollar and higher commodity prices may be helping wheat. Russia troop buildup in Belarus also could add a war premium to wheat. Long range US south plains dry forecast could offset slow US export pace. KWH stated the week near 8.17 only to drop to 7.53. KWH is near 7.70 with resistance near 7.86-7.89.
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