December 5 Afternoon Comments

By ADM Investor Services Research Team

SOYBEANS

Soybeans and meal were able to build on early strength and finish Thursday’s trading with moderate gains, while bean oil lost ground at midsession and closed near unchanged levels. Reports that the Argentine crusher Vicentin was having payment restructuring due to financial stress boosted meal prices which in turn lifted soybeans as well. The USDA reported daily export sales of 245,000 tonnes to unknown destinations, and that provided early support to the market. In addition, a rebound in the Brazilian currency provided carryover support to the soy complex.  With the oversold condition for meal, the slow stochastic buy signal crossover could be signaling a shift in the trend. With managed money fund traders net short a hefty 32,308 contracts for meal, buying could increase as resistance levels are violated. A strong basis tone for South America and a sense that the global livestock production profitability trends could support higher than expected demand in the months just ahead helped to support.

The Export Sales Report showed that for the week ending November 28th net soybean sales came in at 683,783 tonnes from trade expectations for 700,000 to 1.3 million tonnes. Cumulative soybean sales have reached 53.7% of the USDA forecast for the 2019/2020 (current) marketing year versus a 5 year average of 73.1%. Net meal sales came in at 181,050 tonnes from trade expectations for 100,000 to 300,000 tonnes. Cumulative meal sales have reached 41.2% of the USDA forecast versus a 5 year average of 48.5%. Net oil sales came in at 10,781 tonnes from trade expectations for 5,000 to 25,000 tonnes. Cumulative sales have reached 43.2% of the USDA forecast versus a 5 year average of 36.7%.

CORN

March corn found strength into the mid-day after lower trade early, but fell back on the defensive late in the day to finish Thursday’s trading session with a moderate loss. Corn found early support from a rebound in the Brazilian currency, but that faded after the release of a disappointing export sales report which showed that for the week ending November 28, net corn sales came in at 546,115 tonnes for the current marketing year and 2,413 for the next marketing year for a total of 548,528. Traders were expecting sales near 500,000 to 900,000 tonnes. Cumulative sales have reached 31.1% of the USDA forecast for the 2019/2020 (current) marketing year versus a 5 year average of 46.4%. Sales need to average 815,000 tonnes per week to reach the USDA forecast. For the USDA Supply/Demand update next week, traders see US corn ending stocks near 1.919 billion bushels (1.890-1.960 billion range) as compared with the November estimate of 1.910 billion bushels. For world ending stocks, traders expect stocks near 295.52 million tonnes (292.0-298.2 million range) as compared with the November estimate of 295.96 million tonnes. Brazil production is expected near 100.9 million tonnes (100.0-101.5 million range) as compared with the November USDA estimate of 101.0 million tonnes. Argentina production is expected near 49.77 million tonnes (49.0-50.0 million range) as compared with the November USDA estimate of 50.00 million tonnes.

WHEAT

March wheat failed to find new buying interest after higher trade early, and was unable to shake off late pressure as it finished Thursday’s trading session with a moderate loss.  Reports that Algeria bought around 500,000 tonnes of soft wheat in a tender that closed Wednesday provided early support to the market. The UN’s Food and Agriculture Organization forecast 2019/20 Moroccan wheat production would come in at 4.5 million tonnes versus 7.3 million last season. For the USDA Supply/Demand update next week, traders see US wheat ending stocks near 1.01 billion bushels (0.989 to 1.025 billion range) as compared with the November estimate of 1.014 billion bushels. For world ending stocks, traders expect stocks near 286.18 million tonnes (283.9-288.5 million range) as compared with the November estimate of 288.28 million tonnes. The weekly export sales report showed that for the week ending November 28th, net wheat sales came in at 228,086 tonnes from trade expectations for near 300,000 to 700,000 tonnes. Cumulative sales have reached 63.7% of the USDA forecast for the 2019/2020 (current) marketing year versus a 5 year average of 70.8%. Sales need to average 354,000 tonnes per week to reach the USDA forecast.

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2019-12-05T21:10:02+00:00 December 5th, 2019|