MARKET COMMENTARIES

Morning Comments/Ryan's (ATI)

Morning Grain Comments January 20, 2021

Information provided may include opinions of the author and is subject to disclosures found at the end of this document. 

HIGHLIGHTS 

  • TRENDS—Sharply lower: CH, -$.10; SH, -$.2675; WH, -$.1275; KWH, -$.06.  Dalian: SK, -34 ¼; CK, -8 3/4    
  • What caught Larry’s eye: Obviously the sharp sell-off in beans the past couple of days, approaching $.60 per bushel is an attention grabber.  Yet, BOY SB exports need to total approximately 595 mbu (755 LY); and unshipped sales are nearly double at 460 +/-??
  • Global equity markets are generally higher, awaiting the changing of the guard in Washington today 
    • Asia:  Mostly higher:   Nikkei, -0.38%; Shanghai, +0.47%; Hang Seng, +1.08% 
    • EUROPE:  Higher:  DAX, +0.56%; FTSE, +0.10%; CAC, +0.50%  
    • WALL STREET: Higher–DOW futures, +69; S&P, +15.5; NAS, +104.25
    • EXTERNALS: Mar crude, +$0.69 @ $53.67Gold: +$11.40 $1,852; Mar $ Index, -.001 @ 90.475 
    • T-storm Weather®: In Argentina, dry & hot weather dominate over the next 5-7 days.  Scattered thunderstorms follow as a few waves of energy and / or cool fronts pass next week, most likely producing 1.00" to 2.00" within a wide area leading into February.  In Brazil, upper-level high pressure limits rainfall across the northeast quarter of soybeans over the next week, while rain gradually diminishes across Mato Grosso, and occasional thunderstorms form along the remnant of a cool front in southern areas
  • CH, dn $.10 @ $5.16; CK, dn $.1025 @ $5.18.  Fund selling on Tuesday totaled 10 K                   
  • SH, dn $.2675 @ $13.59; SK, dn $.2750 @ $13.5575.  Funds: Sold 12 SB, 9 SBM, 7 SBO. Board crush: $0.64; (H/H), +1; LY, $0.98
  • WH, dn $.1275 @ $6.5950; WK, dn $.1250 @ $6.61.  The funds were even in yesterday’s trade    
CORN/SORGHUM
  • ATI Research: Updated ending stocks estimate for 20/21 U.S. corn is 1.311 bbu vs. January USDA estimate of 1.552
  • Consultant: Brazil corn est. is unch at 102.0 MMT.  Reports indicate that most Brazilian farmers are going to plant all intended safrinha (double crop) corn, even though 15-30% will be planted after the ideal planting window has closed
  • T-storm Weather®: Hot, dry weather affect Argentina corn this week.  But since soil moisture is much-improved vs. several weeks ago, rains in 1-2 weeks are likely sufficient to maintain adequate soil moisture leading into early Feb. 
  • Weekly EIA report will be released on Friday, Jan. 22 at 10:00 am CST
SOYBEANS/WHEAT
  • ATI Research: Updated ending stocks est. for 20/21 U.S. soybean is 0.112 bbu vs. January USDA estimate of 0.140
  •  Consultant: Argentina 2020/21 soybean crop est. is unchanged at 46.0 MMT; neutral/lower bias going forward 
  • T-storm Weather®: Scattered thunderstorms affect a wide area of soybean production next week in Brazil, as cool fronts sweep northward and dissipate
  • ATI Research: Updated ending stocks est. for 20/21 U.S. HRW wheat is 0.333 bbu vs. January USDA est. of 0.334
  • T-storm Weather®: only 24% & 17% of expected U.S. HRW & SRW production was drier than normal over last 90 days
ENERGY
  • Firm: CLH21, +$0.69 @ $53.67; EBH, +$0.40 @ $56.30; EBH-CLH-0.28RBH, +.0133NGH, -.052HOH, +.0053
  • Chicago ethanol was $.03375 lower at $1.55875/gal.  Basis, mostly firm: NYC, -$.00625 @ $.07125; Gulf, +$.00375 @ +$.09625; Dallas, +$.00875 @ +$.06125; Tampa, +$.01875 @ +$.16125; LA, +$.02375 @ +$.09125
  • Ethanol RINs, firmer: 2019’s, +1.50 @ 82-85; 2020’s, +1.75 @ 85 ½-88; 2021, +2.25 @ 86 ½-88                                                                                                                                                                                       
  • The Feb RBOB/Jan ethanol spread is $.0240 higher at -$.0078 per gallon   
LIVESTOCK/POULTRY                                         
  • Choice boxed beef was $2.45 higher on Tuesday at $217.49, and is up $8.35 versus last week   
  • 5-Area Weekly Weighted Average Steer price was dn $1.75 v. last week at $109.52/cwt, and is dn $14.51 v. last year 
  • The mandatory pork carcass cutout value declined $1.02 on Tue. to $76.21, and is dn $1.60 compared to a week ago  
  • Lean Hog Index firmed $0.12 on Tue. to $65.65.  February futures fell $1.45 but remain $0.825 above the index     

Sources: Bloomberg, Dow Jones, AP, DTNT-storm Weather®

The risk of trading futures and options can be substantial. All information, publications, and material used and distributed by Advance Trading Inc. shall be construed as a solicitation. ATI does not maintain an independent research department as defined in CFTC Regulation 1.71. Information obtained from third-party sources is believed to be reliable, but its accuracy is not guaranteed by Advance Trading Inc. Past performance is not necessarily indicative of future results.