by Steve Freed
Soybean futures ended sharply higher. SH made new highs despite the fact USDA did not make as much bullish changes to their US and World soybean Supply and Demand than the bulls were hoping. Most in the trade are trading lower 2022 South America soybean supplies and higher US demand than what USDA said today. USDA lowered US 2021/22 soybean carryout 25 mil bu. This due to higher crush. This due to higher soymeal exports and higher soyoil domestic use. USDA dropped Brazil soybean crop 5 mt to 134.0. They dropped Argentina crop 1.5 mmt to 45.0. Some feel final crops could be down another 14 mmt. Most look for SH to continue to trend higher. SX may also need to trend higher to buy more US 2022 soybean acres. USDA dropped China soybean imports to 97.0 mmt. Weekly US soybean export sales are est near 1,000-2,500 mt 1,095 last week.
Corn futures ended higher and near session highs. Trade was hoping that corn futures would extend gains post USDA. USDA failed to make many changes to their January numbers. Rumors that China was either pricing or had bought 2 mmt US corn sent CH to new highs and CH over CK. Some link the rumored China buying to talk of lower Argentina crop and exports. CH-CK Spread had heavy volume. End users and World buyers continue to be large shorts. US farmer and funds are the longs. USDA left US 2021/22 corn carryout unchanged at 1,540 mil bu. They dropped Brazil crop 1.0 mmt to 114.0.0. They left Argentina corn crop at 54.0 mmt. Some feel final crops could be down another 8 mmt. Most feel CH and CK could trend higher. Most now could see CH test 6.80. China corn imports were left at 26 mmt. Mexico imports are est at 44.2 mmt vs 43.8 ly. USDA estimates World corn trade at 203.6 mmt. This is down .6 from last month. USDA estimates US corn exports at 61.6 mmt vs 69.9 ly, Brazil 43.0 vs 20.5 ly, Argentina 39.0 vs 40.2 and Ukraine 33.5 versus 23.8. One can see the importance of the SA crop and Ukraine exports and implications a lower supply could have on final US exports, US carryout and futures and spread trade. Weekly US ethanol production was down from last week but still above last year. Stocks were down from last week. Margins remain negative. Weekly US corn export sales are est at 500-900 mt vs 1,175 last week.
Wheat futures ended higher. MWH extended gains following Tuesdays lower
Canada estimate of Dec 31 wheat stocks. Wheat tended to be a follower to corn and soybeans. Overnight prices were lower in anticipation that USDA would increase US carryout. USDA raised US 2021/22 wheat carryout due to lower HRW exports. USDA did lower World wheat end stocks from 279.9 mmt to 278.2. Lower Argentina and Canada stocks were partially offset by higher China and Ukraine. USDA raised World wheat demand 2.5 mmt. USDA increased World wheat exports to 206.7 mmt from 204.4. Imports were raised to N Africa, Middle East and SE Asia. USDA estimates EU export at 37.5 mmt, Russia 35.0, Some feel both could be down a total of 10 mmt. Australia is 25.5, Ukraine 24.0, Canada 15.2 and Argentina 14.0. USDA raised India wheat exports to 7.0. Weekly US export sales are est near 275-500 mt versus 161 last week. US wheat futures could still be undervalued id US 2022 weather is less than Perfect. EU, China and India account for 50 percent of World production.
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