January 11 Afternoon Comments

By Steve Freed

Soybeans, soyoil, corn and wheat traded high. Soymeal traded lower. US Dollar was higher. Crude was lower.

SOYBEANS

Soybeans edged higher on talk of drier than normal weather in Brazil and wetter than normal over parts of Argentina. Another group lowered their latest estimate of the 2019 Brazil crop due to dryness. World Sep-Dec soybean exports are est near 45.4 mmt vs 49.3 last year. US exports are est near 17.6 vs 29.5 ly. Brazil is est near 18.4 vs 11.2 ly. China imports are est near 24.2 vs 33.4 ly. Rest of World imports are est near 21.2 vs 15.9 ly. If we were the USDA, we would have lowered US 2018/19 soybean carryout from 955 to 920. This due to a lower 2018 crop estimate. Globally. we would have dropped World soybean end stocks 1.0 mmt due to the lower supply. We estimate managed funds are net short 11,000 soybean contracts.

Soybean Futures Chart

CORN

Corn futures edged higher on low volume and in a narrow range. Corn market is starving for new news. There is no daily USDA export sales report, weekly USDA export sales data, Jan USDA crop report or weekly CFTC commit of traders report. On one hand the lack of ne news id limiting trade. On the other hand once the government shutdown is over the release of all the data could increase market volatility. If we were the USDA, we would have lowered US 2018/19 corn carryout from 1,781 to 1,679. This due to a combination of a lower 2018 crop estimate and a slightly higher export guess. We would have lowered slightly US ethanol production due to the lower margins. Globally. We would have dropped World corn end stocks 1.0 mmt due to the lower supply. China increased their estimate of the 2018 corn crop from 215.0 mmt to 257.3. At the same time they also increased use 34.5 mmt to 285.3. We estimate the managed funds are net long 102.000 corn contracts.

Corn Futures Chart

WHEAT

Wheat futures traded higher. For the week, Winter Wheat prices are up roughly 8 cents for SRW, up 3 cents in the HRW, and up 3 for HRS. News that Egypt had bought only Russia wheat in their tender offered resistance. Lack of USDA data limited trade interest. Overnight there was talk that Ukraine may not pay exporters the VAT tax subsidy. There was also talk that Russia Ag Minister could begin to limit new wheat exports due to record high domestic prices. Not sure what the USDA would have done with US 2018/19 wheat carryout. Some have it down 25 mil bu due to a higher export estimate and others have it up 25 mil bu due to a lower export estimate. If we were the USDA we would have estimated US 2019 winter wheat acres near 31.8 million versus 32.5 last year. We estimate the managed funds are net short 10,000 Chicago wheat contracts.

Wheat Futures Chart

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2019-01-11T21:32:09+00:00 January 11th, 2019|