December 7, 2020
Good Morning,
Markets are lower to start the week with corn down 4 and soybeans down 12. Soybeans are leading the markets as of late with South American weather and projected production being the catalyst.
AgRural, a Brazilian agribusiness consultancy, on Friday cut for the third consecutive time its estimate for Brazilian production of corn in the summer, citing dry weather in the nation’s southernmost state of Rio Grande do Sul. AgRural now projects summer corn production in center-south fields to be an estimated 19.4 million tonnes for the 2020/2021 cycle, down from 20.7 million tonnes forecast last month and roughly in line with last season’s 19.7 million tonnes, when dry conditions in Rio Grande do Sul farms also slashed yields and output.
Brazil’s soybean production in the 2020/2021 cycle is expected to jump to a record of 131.79 million tonnes as high prices drove farmers to increase plantings, according to the average of 13 analysts’ estimates polled by Reuters on Friday. This represents a 5.6% rise from what the government says farmers collected last season, which was an estimated 124.8 million tonnes. The poll also shows that a drought reduced expectations for an even bigger crop, as in October the average of analysts’ forecasts showed estimated output this season at 132.25 million tonnes.
Reminder that we do have a USDA report out on Thursday. Very seldom does the USDA alter this report, but corn and soybean stocks are going to be watched closely. They will not adjust yield or production, but will look at use and forward demand.
Have a Safe Day!
Garry Gard
920-348-6844
December 3, 2020
Good Morning,
Markets are unchanged in corn and up 8 in soybeans to start the day.
Rumors abound for Chinese demand for corn, beans and HRW or white wheat. China is also looking to buy new crop soybeans with the dollar discount to current prices. Unfortunately there has been a lot of rumors of cancelations of late that have the markets hesitant to add premium.
On Wednesday, funds were net buyers of 10,000 contracts of SRW Wheat; 12,000 Corn; and sellers of 8,000 Soybeans. Funds are net long 1,000 contracts of SRW Wheat; long 258,000 Corn; net long 172,000 Soybeans.
USDA export sales were 446,400 mt of wheat, 1,371,400 mt of corn, with China taking 154,000 mt, and 406,900 mt of beans. Exports were on the low end for beans and on the high end for corn. The corn sales continue to surprise, especially when you consider this was during Thanksgiving week.
Showers will fall across most of Brazil over the next ten days. It starts in the south and works its way north over the weekend. There will be chances of rain in North and Central Brazil every few days. Argentina is going to dry out over the next 10 days. La Nina looks to be a continuing trend for both Southern Brazil and Argentina.
Have a Safe Day!
Garry Gard
920-348-6844
December 1, 2020
Good Morning,
After yesterday’s fund selling with month end profit taking the markets are steady this morning. Markets are neutral to start the day/month with corn unchanged and soybeans up 3. On Monday, Managed funds were net sellers of 13,000 contracts of Wheat; 27,000 Corn; 17,000 Soybeans. Funds are now net long 8,000 contracts of Wheat; long 257,000 Corn; net long 214,000 Soybeans.
November was a good month in the grain markets with corn closing $.23 cents higher and soybeans closing $1.12 higher. Rallies like this during harvest timeframes are rare but very welcome, especially for producers that were short on sales and space.
There is rain forecast for North and Central Brazil that starts on Sunday. The amounts are .75-2 inches, which is still below normal for this time of year. The models have been over-estimating rain totals for a month, showing heavy amounts coming in, with very little actually hitting the ground. Mato Grosso rarely sees dry weather at this time of year and usually will receive 2-3 inches a week. They may be moving back to a more normal forecast with the 10 day model run and the more into the 9th of December.
I look for the markets to trend sideways to lower during the month of December with South American weather, COVID-19 and Chinese cancelations in the drivers seat.
Have a Safe Day!
Garry Gard
920-348-6844
November 30, 2020
Good Morning,
Markets are lower to start the week and end the month. Corn is currently down 3, soybeans are down 18 and wheat is down 11. The overnight session started out higher with beans taking another stab at 12 dollars futures, missing with a high of 11.99 before falling back and settling lower in the early morning trade. Corn futures traded up to 4.395, making a new high, but also failing and heading lower. Just about every market is lower this morning, whether it be New York, gold or bonds. Even the US dollar is lower.
Russia may increase the size of its grain export quota planned for Feb. 15-June 30 to 17.5 million tonnes from 15 million tonnes, the agriculture ministry said.
There are rumors that China is preparing to allow another 5.0 mmt of work corn purchases via TRQ/GMO licenses. China has been mostly absent recently for corn and new bean purchases, even cancelling and rolling out some cargoes to next year.
The bulls continue to talk about dryness in Argentina and Brazil, yet the weather models don’t quite back it up. Mato Grosso is forecast to see .75 to 1.5 inches of rain in the next 10 days. Argentina just received 1 to 3.5 inches of rain over the weekend. Some heavy rains are forecast this week with up to 5 inches forecast in Eastern Brazil. Temps will be between 80 to 100 degrees, depending on the placement of rain. This forecast looks bearish, and am not sure we are trading weather anyway.
Looks like profit taking going into the end of the month for corn and beans. The weather forecast alone, should have prices down more than they are. At some point this market is due for a bigger correction, and I guess we’ll know it when we see it. The market is dangerously long.
Have a Safe Day!
Garry Gard
920-348-6844
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
