Ami Heesch

Jan 11, 2021

Highlights

  • USDA final production and stocks data to be released tomorrow at 11 AM CST.
  • Global infections were said to have surpassed 90 million with ideas that there will not be enough vaccines rolled out to overshadow the virus this year.
  • Energy markets are on the defensive with crude oil down 46 cents at $51.78/barrel.
  • US$ up 454 at 90.551, the gold market is up 3-4 bucks and the CD$ is down 0.00445 at 0.7822.
  • DJIA down 224 at 30765, S&P down 25 at 3792 and the NASDAQ down 89 at 13008. 

Corn

  • The corn market traded slightly higher as Argentina moves to ease restrictions on their corn exports. Prices drew additional support form expectations that the USDA will trim US and world ending stocks.
  • Argentine government official removed ban on corn exports and replaced it with a 30k tonne export max on a daily basis.
  • China’s Ag Ministry looks to approve imports of tow new GMO corn varieties (Bayer and Syngenta were noted).
  • China’s corn values were 6 ¼ cents higher overnight.
  • Average trade estimate for US ending stocks at 1.599 billion bushels (1.400-1.782) and 1.702 bb in December.
  • Average trade for world stocks at 283.53 mmt (269-287.96) and 288.96 in December.
  • Dec 1 stocks are estimated at 11.951 billion bushels (11.590-12.305) 1.995 in Sep 2020 and 11.327 bb in December 2019.
  • Spreads: H/K 1 carry, K/N 2 ½ inverse, N/U 38 ¼ inverse, N/Z 53 ¾ inverse, Z/H 5 carry. 

Outlook: higher trade on tightening supplies and SA weather concerns 

Oilseeds   

  • The soybean market traded higher on ideas of tightening supplies, ahead of tomorrow’s USDA data dump. Prices drew additional support from recent Chinese purchases and SA weather concerns.
  • There were 61 soybean deliveries posted against the January contract. The last trading day for January beans is January 14th (noon expiration).
  • March palm oil closed lower, down 33 ringgit, at 3,797 ringgit, on reports of record high imports for December and slowing exports for January.
  • China’s soybean values: No1 beans up 45, No 2 beans up 138, meal up 15-16 bucks, oil down 49 points, palm down 83 points.
  • The average trade estimate for Dec 1 grain stocks is at 2.920 billion bushels, compared to 0.523 mb in September and 3.252 bb in Dec 2019.
  • US ending stocks are estimated at 0.139 mb (0.105-0.166) versus 0.175 mb in December.
  • World stocks are estimated at 82.66 mmt (75-85) compared to 85.64 mmt in December.
  • The average trade estimate for SA bean production: 48.44 mmt for Argentina and 131.42 mmt for Brazil.
  • Spreads: H/K 3 ¼ inverse, K/N 14 ½ inverse, N/Q 49 ¼ inverse, Q/X 152 ½ inverse, N/X 201 ¼ inverse, X/F 3 ½ inverse. 

Outlook: higher trade on tight supplies, renewed Chinese demand and SA weather concerns 

Wheat

  • The wheat market traded higher, bouncing off last week’s weakness and strength in the row crops.
  • China sold 2.0 mmt of wheat from their state reserves.
  • Pakistan has purchased nearly 100k tonnes of wheat over the past few days at $305-$306/tonne C&F, most likely from the Black Sea Region.
  • Average trade estimate for 2021 winter wheat seedings: all winter at 31.528 million acres, HRW at 22.140 million acres, SRW at 5.884 million acres, White Wheat at 3.514 million acres.
  • Dec 1 stocks estimated at 1.695 bb (1.585-1.827), 2.159 in Sep 2020 and 1.841 bb in Dec 2019.
  • US ending stocks are estimated at 0.859 mb (0.837-0.900) and 0.862 mb in December.
  • World stocks are estimated at 315.37 mmt (310.0-318.36) and 316.50 mmt in December.
  • Spreads: Mpls H/K 8 ¼ carry, Kansas City H/K 4 ½ carry, Chicago H/K 1 carry. Mpls March sits at 10 ½ cent premium to KC March. 

Outlook:   higher trade, rebounding from last week’s weakness