Ami Heesch

Jan 13, 2021

 Highlights

  • Surprise! Surprise! Surprise! The USDA has riled the corn and bean markets to levels not seen since 2013! 
  • The grains are going strong with corn up 21-22 cents, Beans up 8-10 cents, meal up 1-2 bucks, oil up 38 points, Mpls up 12, KC up 11 and Chicago up 7-8 cents.
  • Energy markets are firmer with crude oil up 16 cents at 53.37/barrel.
  • US$ up 0.152 at 90.246, gold up 10 bucks at 1854, CD$ down 0.00035 at 0.7858.
  • DJIA down 81 at 30892, S&P down 14 at 3780 and NASDAQ
  • Russia looks at possibly imposing a tax on corn and barley exports (10 euros and 25 euros).
  • Gains in oil market tempered from increased COVID -19 cases detected around the globe.  

 

Corn

  • The corn market soars on smaller than expected supplies, dryness in Argentina and demand.
  • Corn quarterly stocks and yield were much lower than wheat the trade was expecting.
  • Ideas are that the next area for March corn to trade in will be form $5.50-$5.60.
  • Spreads: H/K 2 ½ carry, K/N 3 ½ inverse, N/U 51 inverse, N/Z 74 ½ inverse, Z/H 4 ¼ carry.

 

Outlook: higher trade on smaller stocks, SA crop concerns, demand

 

Oilseeds   

  • The soybean market traded higher on extremely tight ending stocks and weather concerns in Argentina.
  • Indonesia looks to import up to 2.6 mmt of soybeans to use for tofu and tempeh production.
  • March palm oil closed lower, down 3 ringgit at 3,692 ringgit.
  • China’s soy values were mixed: No1 beans down 15 ¼ cents, No2 beans up 4 ¾ cents, meal up 20-21 bucks, oil down 4 points and palm down 18 points.
  • There were 11 deliveries posted against the January contract, zero meal and zero oil.  January expires at noon tomorrow.
  • Spreads: H/K 2 ¾ inverse, K/N 16 ¼ inverse, N/Q 55 ¼ inverse, Q/X 165 ½ inverse, X/F 5 ¾ inverse.

 

Outlook:  higher trade on smaller stocks and SA crop concerns

 

 

Wheat

  • The wheat market traded higher on spillover strength in the row crops and uncertainty of Russia’s tax hike to begin in February.
  • Jordan tendered for 120k tonnes of optional origin milling wheat and has gotten 3 offers.
  • Spreads: Mpls H/K 8 carry, Kansas City H/K 3 carry, Chicago H/K ¼ inverse.

 

Outlook:   higher trade on possible Russian tax hike and strong row crop action