November 27, 2020
Good Morning,
Prices are called higher, but exports may produce a lower open in beans. This is one of the few times of the year with no overnight markets. US Stocks are up 80 and crude oil is down 50. A small two sided trade is expected today, with wheat most likely trading higher, bouncing off of Wednesday’s losses. World markets are stable.
Export sales were 65.6 million for corn and 28.2 for soybeans. Corn was right at the 10 week average while soybeans were 50 million bu. below the 10 week average. Rumors of Chinese cancelations that have already been made has the markets on edge the last few days.
Have a Safe Day!
Garry Gard
920-348-6844
November 25, 2020
Good Morning,
Markets are down 4 in corn, and down 6 in bean. Crude oil is up 40 and US Stocks are down 50. A two sided Holiday trade is expected in most markets today and Friday. Market hours are normal today, but close early at 12:00 Central on Friday. Trading interest is going to be diminished today, traders won’t take any risk until Monday of next week, especially in beans with South American weather forecast changes possible, and the potential for Chinese soybean cancelations.
Reuters is reporting that private importers and processors of soybeans in China are looking to cancel out of some of the cargoes of US beans purchased early this year. The importers that did not fix futures during the purchase are looking at negative margins on delivery, and are better off eating the cost of the cancelation. Cargoes can be rolled out to next year if necessary with trading cost. US Gulf basis had dropped from +90 to +60 in the past week. New Chinese business has been absent. The buying started in June, and much of what is on the books had futures coverage at the CME, when prices were low.
Have a Happy Thanksgiving,
Garry Gard
920-348-6844
November 24, 2020
Good Morning,
Markets are weaker this morning with corn down 4 and soybeans are down 9. Overnight saw more weakness in the markets with rumors about China. Talk that China will wash out open US sales and could switch some sales to Brazil. Despite talk of expanding hog numbers, China crush margins have turned negative and soymeal demand has slowed. Large volume of soybean imports to arrive is also weighing on margins. All it takes is someone to mention a cancelation and beans can drop. At some point roll backs, and switches to South American are inevitable. This happens all too frequently and is a huge reason producers need to take advantage of the rallies we have seen.
One weather map is adding rains for parts of Brazil and Argentina is also offering resistance to futures.
This could be a month end correction or something deeper than that is sales are cancelled but either way the markets are at very good levels and should be captured.
Have a Safe Day!
Garry Gard
920-348-6844
November 23, 2020
Good Morning,
Markets are stronger to start the week with corn up 4 and soybeans up 9.
A Covid-19 vaccine has been developed at the University of Oxford. Early analysis had stopped 70% of participants falling ill. The effectiveness rose to 90% for one of two regimens, using half a dose followed by a full dose later, close to the same results as Pfizer and Moderna.
Reports that the Russian ag ministry is considering putting a duty on grain exports to preserve domestic supplies is supporting wheat which is up 9. The Ag ministry is already willing to subsidize wheat millers to lower flour prices. An export tax would limit further sales out of Russian and would be bullish to European and US wheat prices.
The weekend weather was dry and temperatures were above normal for Brazil and Argentina, crop stress is increasing. The 10 day forecast has about as dry a forecast as you can have for Brazil, which is really unusual. Southern Brazil and Argentina do have better chances of rain, and are about the best that have been forecast for months, with 1-4 inches coming in the next 10 days. The 11-15 day model is also dry for Northern Brazil, while Argentina should see more rain accumulate.
Prices faded against this exact same rally on Friday, going into a weekend with covid risk abound. This rally probably sticks today, with news out of Russia, and more dry weather for Brazil. Argentina and Southern Brazil getting rain is probably holding the market back from bigger gains. $4.30 appears to be the ceiling for CZ at the moment with strength fading as we get closer to that level.
Have a Safe Day!
Garry Gard
920-348-6844
November 19, 2020
Good Morning,
Weaker markets to open the day with corn down 5 and soybeans down 7. The grain markets are losing the outside market tailwinds as the week progresses and have taken the opportunity to bank some profits off multi-year highs this morning.
This morning’s weekly export sales report showed corn at 42.9 Mil. Bu compared to the 10 week average of 67.5. Soybeans came in at 51.0 Mil. Bu. compared to the 10 week average of 85.2. While both were lower than the 10 week average they were above trade estimates.
Soybean prices are retreating on news that central and north Brazil saw .50-2.50 inches of rain. This was more than expected. There is also talk that the dry areas of south Brail and north Argentina could see some new rains. Lack of new China buying US soybeans is also offer resistance near new contract highs. China soybean crush margins have turned negative.
Overall demand for U.S. commodities remains extremely strong and will keep the trade skittish into the new year, and until a decent South American harvest can be reasonably assured.
There is too much Covid news for the markets to resume a higher path for now. Fund managers are banking some profits, which started in Europe overnight. We have seen hardly any break in the market lately, but we have also seen prices close well off the high’s for several sessions. This could be the beginning of the volatility state of the market. Remember, we don’t run out of beans in November, we run out in August, and a lot is going to happen between now and then.
Have a Safe Day!
Garry Gard
920-348-6844
