- Row crops score new highs to end 2020; Argentina stays dry; below normal precipitation offered to Mato Grosso.
- Chicago ag futures are mixed at midday with the summer row crops following the overnight trend while wheat futures sag on profit taking. The volume of trade has been better than previous end of the year’s as investor interest in the grain markets is growing for 2021. We look for new managed money to be pushed into the raw material space as vaccinations end the pandemic and spirit return to the US and world economy. Moreover, amid the falling US$, the interest for an inflation hedge is real. Bullish price trends look to accelerate in 2021 amid growing demand and the opportunity provided by historically low interest rates in a world awash with liquidity.
- Corn, soybeans, soyoil, soymeal, bitcoin and the US equity markets look to end 2020 at historic highs, a highly unusual feat amid a pandemic that is still worsening. The commodity outlook for 2021 is bullish.
- US weekly export sales for the week ending December 24 were 19.1 million bu of wheat, 38.0 million bu of corn, and 25.6 million bu of soybeans. The soybean and wheat sales were above trade expectations. And the shipment data showed that the US exported 95.0 million bu of soybeans last week, well above inspections that were reported Monday. The shipment data argues for record large December soybean exports, a pace that seems unlikely to slow much in January.
- The US has exported a record 1,374 million bu of US soybeans to date and will reach over 1,400 million bu next week (through December). That is an amazing monthly export average pace of 350 million bu or 87.5 million bu/week. The market must force a dramatic slowing of US exports with China shipping out the beans quickly. We project January US soybean exports of 310 million bu or more than 1,700 million bu or 78% of the annual export forecast through January.
- For their respective crop years to date, the US has sold 755 million bu of wheat (up 63 million or 10% from last year), 1,700 million bu of corn (up 977 million or 135%), and a record 2,015 million bu of soybeans (up 935 million or 87% from last year). WASDE has a big chore on January 12 to increase 2020/21 US corn, soybean and even wheat export estimates while preserving historically tight end stocks. US soyoil sales were also sizeable at 60,700 mt which exceeded expectations. US soyoil is the cheapest vegoil in the world and it is starting to uncover increased world demand based on availability and price. We anticipate broadening world demand for US soyoil in early 2021.
- The S American GFS weather forecast at midday is drier in Central and Eastern Argentina but is otherwise consistent with morning output. Argentina rainfall in excess of 1″ will favour the very far western fringe of corn and soybean producing areas. The vast majority of Argentina’s corn and soy belt will see two-week accumulation of just 0.6-0.7″ or just 20-40% of normal. Net draws in soil moisture will continue. Note that the Buenos Aires Grain Exchange this week pegged soy conditions at 42% good/excellent, vs. 55% a year ago. Early planted corn in Argentina is rated at just 17% good/excellent, vs. 35% last year.
- Widespread rains returns to Brazil next week, which will be welcomed by producers there. However, we note soaking totals in Brazil will be confined to the Centre-East. Two-week rainfall in Mato Grosso will be just 50-70% of normal. January weather in S America is critical to row crop yields.
- US and world grain/oilseed markets have begun to better reflect the massive change in supply and demand that has occurred since late summer. The market’s next chore is to determine the price that eliminates/reduces soy demand and encourages incredible Northern Hemisphere acreage expansion in 2021.
- Wishing all readers a very happy, successful and prosperous New Year, we hope 2021 proves to be better than 2020.