MARKET COMMENTARIES

Morning Comments/Ryan's (ATI)

Morning Grain Comments January 15, 2021

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

HIGHLIGHTS 

  • TRENDS—Mixed: CH, -$.0025; SH, -$.0825; WH, +$.1450; KWH, +$.14.  Dalian: SK, -7; CK, +1. Del: SM, 94; SBO, 13; RR, 79; SB, 11    
  • What caught Larry’s eye: China’s preliminary soybean imports for December declined 2.1 MMT to 7.5 million and with crush estimated at 8.3 would suggest an 800 K decline in the country’s reserve stocks last month  
  • Major stock indices are slightly weaker, fall-out from yesterday’s disappointing jobs report?
    • Asia:  Mixed higher:  Nikkei, -0.62%; Shanghai, +0.00%; Hang Seng, +0.27% 
    • EUROPE:  Down:  DAX, -0.72%; FTSE, -0.89%; CAC, -1.00%  
    • WALL STREET: Weaker–DOW futures, -129; S&P, -16.50; NAS, -40.5
    • EXTERNALS: Mar crude, -$0.75 @ $52.87Gold: +$0.30 $1,852; Mar $ Index, +.150 @ 90.365 
  • T-storm Weather®: In Argentina, dryness eased the last 1-2 weeks, & another 1.00"-2.00" falls Fri.-Sat.; 10 days of drying follow, initially accompanied by coolness, then a heat wave starting Tue.-Wed.  The heat wave will likely be disrupted within Jan. 25-30 when we are forecasting scattered rain.  Two cool fronts focus rain on central & southern Brazil through Sun.-Mon., most likely resulting in the wettest one-week period so far in the growing season from Mato Grosso through Mato Grosso do Sul & Parana
  • CH, dn $.0025 @ $5.234; CK, dn $.0075 @ $5.37.  Strong corn/milo sales, higher beans encourage 15 K fund buying                  
  • SH, dn $.0825 @ $14.2225; SK, dn $.0775 @ $14.0850.  Funds: Bot 8 SB, 7 SBM, 7 SBO. Board crush: $0.66; (F/F), -9; LY, $0.96
  • WH, up $.1450 @ $6.8450; WK, up $.14 @ $6.85.  Funds buy 6 K, awaiting more definitive Russian export policy   
CORN/SORGHUM
  • March 2021 corn futures on Thursday closed at $5.34 ¼; one year ago, March 2020 corn futures settled at $3.75 ½
  • ATI Research: U.S. corn export sales for the week ending Jan. 7 were a robust 56.6 mbu, or nearly double the year ago level of 30.9 mbu.  Unshipped U.S. corn export sales are a record 1.128 bbu—nearly triple 0.388 bbu from last year 
  • T-storm Weather®: In Argentina, widespread rain aided all crops the last 5 to 10 days, leaving ~50% of expected early- corn production drier than normal over 30, 60, & 90 days ending Tue. (~35 points lower than at the start of January)
  • Buenos Aires Grain Exchange: 16% of Argentina’s corn crop is rated Poor/Very Poor vs. 23% last week & 3% last year 
SOYBEANS/WHEAT
  • March 2021 soybean futures on Thursday closed at $14.30 ½; one year ago, March 2020 futures settled at $9.24
  • ATI Research: Unshipped U.S. soybean export sales on Jan. 7 were 0.535 bbu—more than double 0.266 bbu last year
  • T-storm Weather®: Most likely forecast is for 3.00”-5.00” of rain to fall the next two weeks in central Brazil soybean areas; ~5.25” is normal.  This would be the best rainfall coverage thus far this season for the region  
  • ATI Research: Unshipped U.S. HRW wheat export sales as of Jan. 7 were 53 mbu—the lowest total in five years
  • T-storm Weather®: 28% of U.S. HRW wheat was drier than normal over last 90 days; 12% of SRW was similarly dry 
ENERGY
  • Weaker: CLH21, -$0.75 @ $52.87; EBH, -$1.01 @ $55.41; EBH-CLH-0.25RBH, -.0168NGH, +.075HOH, -.0181
  • Chicago ethanol eased $.0125 Thursday to $1.60625/gal.  Basis, mostly weaker: NYC, -$.00125 @ $.06875; Gulf, +$.00250 @ +$.09375; Dallas, -$.0075 @ +$.04375; Tampa, -$.0075 @ +$.12875; LA, -$.0075 @ +$.05875
  • Ethanol RINs, Higher: 2019’s, +9.00 @ 74-90; 2020’s, +9.00@ 80-90; 2021, +8.50 @ 80-90                                                                                                                                                                                       
  • The Feb RBOB/Jan ethanol spread is off $.00184 at -$.0495 per gallon   
LIVESTOCK/POULTRY                                        
  • Choice boxed beef firmed $2.37 on Thursday to $213.37, and is $7.56 higher versus last week  
  • Cash cattle trade has been noted this week at $108-$112 in the South, which is $1.00-$2.00 lower than a week ago
  • The mandatory pork carcass cutout value was $2.52 higher on Thu. at $79.20, and is up $0.87 versus a week ago   
  • Lean Hog Index gained $0.39 on Thu. to $65.87.  February futures eased $0.550 but remain $0.43 above the index
Sources: Bloomberg, Dow Jones, AP, DTN, T-storm Weather* 
 

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