Grains Back Trading Higher
What a week! Grains are higher. SN is up 26 cents and near 16.10. SX is up 15 cents and near 14.11. SMN is near 430.8. BON is near 66.12. CN is up 9 cents and near 6.83.. CZ is up 14 cents and near 5.72. WN is up 19 cents and near 7.20. KWN is up 16 cents and near 6.74. MWN is up 19 cents and near 7.60. US stocks are higher. Crude is higher. US Dollar is lower. Gold is higher. Copper is lower.
Soybean futures are back trading higher. Some feel Thursdays losses were linked in part to follow through selling after USDA failed to give bulls any good reason to stay long, talk a bridge on Miss river could collapse with 771 barges unable to pass and talk that there are 3 Brazil soybean cargoes loading for US east coast.
Key fundamentals did not change. US 2021/22 soybean demand could be higher than USDA first guess and could drop US carryout below 140 mil bu. This suggest US summer weather will need to be perfect or prices go higher. USDA unprecedent increase in US 2021/22 biofuel soyoil demand should push soyoil prices higher. Argentina soybean harvest is 71 pct done with crop est near 43 mmt.
Concern about US river barge navigation, low US weekly export sales and fact USDA est US 2021/22 corn carryout near 1,507 mil bu dropped CN limit down. Talk that the river could reopen later today and that China may now be up to 10-12 mmt new crop US corn bought is supporting prices. USDA first guess of US 2021/22 corn carryout may be 500 too high. Brazil is still dry and crop could drop below 90 mmt. Going into critical US summer weather be prepared for wild and volatile price swings following each 2 week weather forecast. Argentina corn harvest is near 25 pct with crop est near 46 mmt.
Wheat futures were a follower to the limit down move in corn futures. Rains in south US plains and Midwest and Europe also weighed on futures. Continued dryness in Canada prairies, US PNW and north plains is still positive to futures. Talk that S Russia to S Germany weather is turning drier and could remain dry for next 30 days could also be supportive.
On Thursday, Managed funds were net sellers of 16,000 contracts of SRW Wheat; 65,000 Corn; 27,000 Soybeans; net 18,000 Soymeal, and; 5,000 in Soyoil. We estimate Managed Money net short 9,000 contracts of SRW Wheat; net long 281,000 Corn; long 204,000 Soybeans; long 49,000 Soymeal, and; net long 88,000 Soyoil. Fund selling felt like trying to push an elephant through a key hole.
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