Ami Heesch

Feb 19, 2021

Highlights

  • While most slept: CBOT row crops traded “mixed” overnight, higher at 730am
  • The nation’s east coast is seeing the nasty weather this morning, meanwhile back in the midsection the warmup is underway. The deep south, unfortunately, is slow to recover from the recent snow & ice causing a myriad of problems.
  • Equity, Energy & Metal markets as of 7:15 a.m.  Dollar Index down 377 ticks @ 90.216, spot Crude Oil off 98 @ 59.54, Dow Futures up 88@ 31,520. Gold is off, Silver is up.
  • The 2021 USDA Outlook Conference concludes today. USDA will issue balance sheets today that seem highly anticipated this year, relatively speaking.
  • March options expire TODAY.  Check your lists.
  • We will see a COT report and a COF today after our markets close.
  • CNN just flashed that the U.S. has officially rejoined the Paris climate accord today.
  • Position players report next week, officially, to Fort Myers.   Play Ball !!!

 

Corn

  • The USDA annual Outlook Conference released S&D’s early this morning. For the 21/22 crop, they used 92 mil ac, creating a 15.15 crop. Carry in was 1.5 bb, eth use 5.2bb, exports 2.65bb leaving a 1.552 carryout. Looks like a safe punt on USDA’s part.  
  • BAGE calls the Argentina corn crop 46 mmt yesterday, with corn conditions up from one week ago but well behind last years crop. Last year’s crop was near 51.5 mmt.
  • Export sales this morning were:  999,200 old crop, 182,600 new crop; ideas had been 800-1.2mmt old, 0-150 new.
  • Corn open interest was “net/net” up yesterday over 17,000 contracts with CH21 down nearly 20,000 contracts with CK up 30,000 +, CN was up abit as well.
  • Basis remains firm, CIF looked mixed at best yesterday. Barge freight felt steady.
  • CH/CK melted into 1 ¼ cent inverse overnight. Quiet trade, small range again. 

Outlook:  …….firm cash, slow sales, sketchy SA weather and now another “good” export sales #. Futures work slowly higher.

 

Oilseeds

  • Export sales were: Beans 455,900 old, 168,000 new; Meal 322,200 old; Bean oil 4,400 old. Sales ideas had been, for beans 300-900,000 old, 50-300,000 new; for meal 100-350,000 old, 0 new & for bean oil 5-25,000 old, 0 new.
  • Basis remains steady/firmer, still.  SH/SK works itself to a 2 ½ c carry overnight.
  • CIF beans were firm yesterday, weather related port issues were supportive values.
  • USDA released S&D’s early this a.m. For beans, 90 mil acres gets us a 4.525 crop; 120 carry in, a 2.210 crush # & a 2.200 export # results in a 145 carry out.  A snug situation.
  • Malaysian Palm oil is 33 ringgit higher overnight.
  • Spot CBOT bean crush values are slightly higher this a.m.
  • In China, Dalian markets were generally higher overnight, with only meal settling lower.
  • March bean oil & Canadian rapeseed both trade higher overnight, like palm oil.
  • The forecast for Brazil holds scattered showers north, with minor drying south, while Argentina looks generally dry ahead.  No “major” forecast changes noted overnight.       

Outlook: ……nice Meal export sales, balance seems uneventful. World oil markets remain nervous. Prices work higher in search of a rationing level. SA weather remains under close watch.

 

Wheat

  • Export sales were:  399,100 old, 214,400 new. Sales ideas had been 250-650,000 old, 0-50,000 new.
  • USDA’s deadline of March 15th fast approaches for enrolling in the ARC or PLC programs for 2021. Giddy up.
  • MATIF wheat, the Paris milling market, is sharply higher again today, with new highs posted.
  • USDA yesterday implied the lowest HRS/Durum planted acreage in some time for 2021 when they used 13 mln acres in their forecast. However, this fits the recent chatter we hear.
  • SovEcon lowered Russian wheat production slightly yesterday, citing the cold weather & the new export tax situation as reasons.
  • The Outlook S&D, released this morning, implies a sub 700 mbu wheat carryout for the U.S. in 21/22. Tightest carry out we have seen in years.  

Outlook: …….ok export sales. USDA Outlook paints a tighter look for the U.S. S&D, especially for HRS & Durum. Weather remains a watch, and winterkill is yet to be known. Higher we work, seems path of least resistance, for now.