by Steve Freed,
Grain calls are mixed. SH is near 9.61. CH is near 3.51. WH is near 4.27. US Dollar is lower. New Year, same fundamentals. Baby it is cold here in Chicago.
For the week, Winter Wheat prices were up roughly 3 cents for SRW, up 5 in the HRW, and up 3 for HRS; Corn is down 2 cents; Soybeans up 1; Soymeal unchanged, and; Soyoil up 30 points.
Chinese Ag futures (May) settled up 12 yuan in Soybeans, up 14 in Corn, down 12 in Soymeal, up 98 in Soyoil, and up 66 in Palm Oil. The Malaysian Palm Oil market was up 29 ringgit at 2,532, basis March, supported by December export data.
Soybean futures are near 3 month lows. Mostly favorable South America weather offers resistance. Good China soybean demand offers support. Corn has been sideways since November. Large US supplies and slow export demand offers resistance. Lack of farmer selling and talk of lower US/World 2018 supply offers support. Wheat futures have been trading lower since the June high. There is still too much wheat in the World. Record cold US temps could offer support. Funds continue to be large net short of corn, soybean and wheat futures.
The South American weather forecast has light rains expected for Argentine growing regions Thursday through Friday of this week—-things look to be generally dry in Argentina over the next 5 days and only light rains over the next 10 period. Good rains are seen for northern Brazil and average rainfall in the south. The 6 to 10 day period for Brazil has close to average rainfall.
A New Year’s Day cold snap in the southern U.S. Plains poses a threat to winter wheat, particularly in Kansas, the country’s biggest producer of the grain, agricultural meteorologists said. The cold is likely to hasten the build-up of ice on the Illinois River, slowing barge traffic and impeding shipments of Midwest corn and soybeans to Gulf Coast export terminals.
For the week ended December 21st, U.S. All Wheat sales are running 7% behind a year ago, shipments 6% behind with the USDA forecasting an 8% decline on the year. Corn sales are running 25% behind with the USDA forecasting a 16% decline on the year. Soybean sales are running 15% behind, shipments 13% behind with the USDA forecasting a 2% increase on the year. Soymeal sales are running 8% ahead of a year ago, shipments 8% ahead with a 5% increase forecasted. Soyoil sales are running 41% behind a year ago, shipments 49% behind with a 26% decrease forecasted.
On January 12, USDA is expected to increase the US 2017 Corn crop, potentially lowers US corn, soybean and wheat exports, estimate record Dec 1 corn and soybean stocks and estimate lower US 2018 winter wheat acres in their annual report. USDA should also increase Brazil 2018 soybean crop and domestic China corn and soybean demand.
Funds bought 4,000 soybeans, 1,000 soymeal, and 4,000 soyoil and sold 3,000 corn and 1,000 wheat on Friday. Funds are estimated to be short 78,000 soybeans, long 27,000 soymeal, net even soyoil, short 211,000 corn and short 145,000 wheat.
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