Midday Comments: 11/13/2020

Grains turned higher on Friday following two-sided Thursday night trade. With solidly higher equity, precious metals & crude oil & a weaker dollar lending support, corn, soybeans & wheat retraced part of Thursday’s losses despite a third straight day without any flash USDA export sales announcement & 4-week-low weekly export sales in corn, 9-week-low weekly soybean export sales & 25-week-low weekly wheat export sales. Much of Friday’s grain rebound looks chart-based.  Corn & wheat tested their August-November chart uptrends & reversed higher after soybeans recovered after falling below Thursday’s lows.  Weekly export sales of corn (38.514 mb), grain sorghum (6.511 mb), soybeans (51.426 mb) & soyoil (88,000 mt) were within pre-report trade expectations during the weekly period ended Nov. 5, but all well exceeded the weekly averages needed to reach Tuesday’s 2020/21 USDA export forecasts.  Sales of wheat (11.045 mb) & soymeal (145,200 mt) were slightly below their average weekly sales needed.  Cumulative corn sales (1,345.1 mb) are still highest thru early November since at least 1979. Cumulative soybean sales (1,833.5 mb) are the best ever by 469.3 mb. Cumulative wheat sales (627.3 mb) are the highest at market week #23 since 2016/17.  China remained a dominant force last week. China bought .417 mb of corn, bringing their 2020/21 total to 424.15 mb. China also bought 27.396 mb of US soybeans, bringing their year-to-date total to 1012.381 mb. China was last week’s only grain sorghum customer, taking 9.653 mb milo, including 2.677 mb switched from unknown destinations. China has booked 114.987 mb of the total 150.3 mb of milo exports. Although it did not book any US wheat, soymeal or soyoil last week, China did buy 35,500 running bales of cotton, 30,500 mt (52.0%) of total 2020 & 2021 US pork sales,  3,500 mt (24.5%) of total US beef sales & 249,000 (64.9%) of all US cattle hides that were sold last week.   At 1:05 pm, Dec. corn futures were up 2.75c, March corn was 1.75c higher, Jan. beans was up 4.25c, March beans were 4.75c higher, Dec. soymeal was up $0.60/ton, Dec. soyoil was 0.12c/lb. higher, Dec. soft red winter wheat was up 6.25c & March SRW wheat was 5.5c higher.  Weekly continuation charts of corn are headed for about a 4c gain, soybean about a 43c gain & SRW wheat about at 7c loss for the week.
 
Recapping Thursday’s price action, grains followed other markets lower yesterday as rising COVID-19 infections in the US & Europe threatened the rosy economic demand scenario that traders have come to believe.  A record-high 154,000 new COVID cases were reported in the US on Thursday, far above the spring peak levels & much more widely distributed than seen in March-April. With several governors, including Illinois, said to be considering new lockdowns to suppress the spread of the virus, speculators decided to take profits while they were still available in equities, grains, crude oil & other markets.  The holiday-delayed EIA Weekly Petroleum Status report was a mixed bag for corn.  The Energy Dept. data indicated that processors brewed 287.238 mil.gal., of fuel ethanol in the week ended Nov. 6—up 4.704 mil.gal. (+1.66%) from the previous week & largest ethanol output since March 20.  But ethanol stockpiles jumped 20.328 mil.gal. (+2.46%) for the week to 846.678 mil.gal., down only 5.15% from last year.  The fact that stockpiles increased at a rate that was more than  4 times the size of the extra weekly output scared traders.  Stockpiles declined last week in the Midwest (-14.448 mil.gal.) & at the East Coast (-20.118 mil.gal.), but were up in the Rocky Mountain (+1.47 mil.gal.) & West Coast (+7.056 mil.gal.) regions & sharply higher at the Gulf (+46.368 mil.gal.)  We suspect that ethanol flowed from the Midwest to the Gulf last week to position ethanol for export.  At Thursday’s close, Dec. corn futures plunged 9c lower, March corn dropped 8.75c, Jan. beans lost 7c, March beans declined 6.75c, Dec. soymeal was $4.60/ton lower, Dec. soyoil eased 0.08c/lb., Dec. soft red winter wheat cratered 9.75c & March SRW wheat tumbled 8.75c.
 
In export news, USDA did not report any daily export sales on either Wednesday, Thursday or Friday.  Algeria’s state grain buyer reportedly purchased 22.046 mb of optional-origin milling wheat for December-January arrival following a tender that closed on Thursday.  
 
Locally, corn basis rebounded 4c higher, soybean basis recovered 6c & wheat basis was steady on Thursday. That builds on Wednesday’s basis gains that saw both corn & soybean basis improve 6c.  Barge freight peaked on Tuesday & then weakened about 12c/bu. on Wednesday-Thursday, bolstering cash bids. 
 
Would you like CBOT futures prices reported to your phone? Top Ag can send you nearby & harvest futures prices for corn, soybeans & wheat at 9:45 am, 11:15 am & 1:45 pm each day.  We provide the service for free, but you may have to pay for text messages--depending upon your phone plan. Call Scott or Jacob at Okawville at 243-5293 or Mike at Trenton at 224-7332 & we'll get you set up! 
 
"Closing Comments" are written by David Marshall, First Choice Commodities LLC, Nashville, IL.  To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@firstchoicecommodities.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness.  Commodity trading involves risks. You should fully understand those risks before trading.