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January 13 Afternoon Comments

Soybeans, soyoil and wheat traded lower. Corn traded higher. Soymeal was unchanged. Crude was lower. Gold was lower.
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Soybeans, soyoil and wheat traded lower. Corn traded higher. Soymeal was unchanged. Crude was lower. Gold was lower.

SOYBEANS

Managed funds had covered most of their net short soybean futures positions going into USDA Jan crop report and the signing of a new trade deal between US and China. Open Interest dropped during the rally in prices. Lack of bullish USDA news offered resistance. Good weekend rains in Brazil also offered resistance. Weekly US soybean exports were near 41 mil bu vs 40 last year. Season to date exports are near 843 mil bu vs 676 last year. USDA left their estimate of US exports on Friday at 1,775 mil bu versus 1,748 last year. Most are still holding out hope that final US exports may be higher than USDA estimate. Most estimate US farmers to plant 85.0 million acres in 2020 versus 76.1 in 2019. USDA estimates US 2020/21 soybean carryout near 533 mil bu. Private estimates range from 350-500. Key is total supply and export demand.




CORN

Corn futures traded higher. Managed funds are net short corn futures and may be covering after USDA Jan report and before US and China sign a new trade deal. Open interest continues to increase in corn futures. USDA failed to lower the US 2019 crop and US 2019/20 corn carryout as much as the bulls wanted. Still news that S Korea bought US corn suggest US prices may be competitive to buyers. Weekly US corn exports were near 18 mil bu vs 40 last year. Season to date exports are near 356 mil bu vs 767 last year. USDA dropped their estimate of US exports on Friday to 1,775 mil bu versus 1,850 previous. A few are still holding out hope that final US exports may be higher than USDA estimate. Key could be China demand and competition from South America and Black Sea. USDA estimates 2019/20 World corn trade near 165.6 mmt vs 181.4 last year. US is 45.0 vs 52.4. Brazil is 36.0 vs 42.0. Argentina is 33.5 vs 36.0. Ukraine is 30.5 vs 30.3. Some are est World 2020/21 corn trade near 174.0. At first glance most estimate US farmers to plant 94.0 million acres in 2020 versus 89.7 in 2019. USDA estimates US 2020/21 corn carryout near 2,717 mil bu. Private estimates range from 2,000-2,625. Key is total supply and export demand.


WHEAT

Wheat futures traded lower giving back most of Fridays gains. Tight US, EU and Russia supplies has helped rally wheat futures esp versus corn. Some spread liquidation today is helping corn but weighing on wheat. Open interest in Chicago wheat futures has been going up since November. Weekly US wheat exports were near 17 mil bu vs 20 last year. Season to date exports are near 565 mil bu vs 495 last year. USDA left their estimate of US exports on Friday at 975 mil bu versus 936 last year. Key could be competition from EU and Black Sea. USDA estimates 2019/20 World wheat trade near 181.0 mmt vs 172.0 last year. US is 26.5 vs 25.4. Russia is 34.0 vs 35.8. EU is 31.0 vs 23.3. Australia was dropped to 8.2 vs 9.0. Some are estimating World 2020/21 wheat trade near 182.0. Most estimate US farmers to plant 45.0 million acres in 2020 versus 45.2 in 2019. USDA estimates US 2020/21 wheat carryout near 872 mil bu. Private estimates range from 725-960. Key is total supply and export demand.

 
 

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