Midday Comments: 12/15/2020

Soybeans erased Monday night losses & turned higher on Tuesday as traders reacted to news that China reported that its hog numbers are now 90% of their pre-swine flu levels & should back to pre-disease levels by spring.  Beans were initially weaker on South American weather maps that call for rainfall across southern Brazil & Paraguay thru Sunday & rainfall in central & northern Brazil next Monday-Wednesday.  Argentina looks to stay dry until Friday-Saturday before 0.75-1.50” rains arrive across key production regions.  Soybeans posted double-digit gains after National Oilseed Processors Association data released at 11 am showed its members crushed more soybeans per day during November than in any month in history.  With 2020/21 crush continuing at record levels, traders bet soybeans were in a demand-driven rally & prices could retest the pre-Thanksgiving high of $12.00.  After being nearly 3c lower overnight, corn clawed back to be fractionally mixed by midday.  Talk of Chinese corn buying has faded in recent days, but reports that Ukraine corn exports could fall 20% below last year did underpin sentiment.  Wheat largely maintained overnight gains during Tuesday regular trading session.  Although Egypt did not purchase any US wheat in this week’s tender, the fact that they paid nearly 21.75c/bu. more than in their last tender offered support.  The trade-weighted US dollar index continued to sag on Tuesday, but is still only about 2% weaker that its average price since August 1985.  Weaker currencies help export-tied industries, but are a headwind for those who buy foreign goods.  Corn & beans recovered to top-range settlements, & wheat close with mid-range gains on Tuesday. At the close, March corn futures were up 3/4c, July corn ticked 1/4c higher, Jan. beans surged 14.75c higher, March beans jumped up 14.25c, Jan. soymeal rocketed $7.50/ton higher, Jan. soyoil rose 0.46c/lb., March soft red winter wheat rallied 3.25c & July SRW wheat was up 2c.  Grains remain range-bound within the highs & lows of Nov-Dec. until proven otherwise. 
 
Tuesday’s National Oilseed Processors Association monthly crush data reported that NOPA members crushed 181.018 mb of soybeans in November, the most ever for that month.  NOPA members account for about 95% of the US soybean crush capacity.  While last month’s crush was down 4.227 mb from the all-time record crush of October due to one less processing day, it was a whopping 16.109 mb above last year & the highest NOPA daily crush (6.034 mb/day) for any month!  Cumulative Sept-Nov. soybean processing stands at 527.754 mb, up 34.882 mb from last year & 27.670 mb above the previous record pace set in 2018/19.  Soymeal exports were record-high for November at 1,081,653 short tons, up 212,884 tons from last year, 135,818 tons higher than in October, the largest monthly soymeal export total since Jan. 2013 & the third-largest monthly soymeal exports in history.  End-November soyoil stockpiles rose to a 5-month-high 1,557.830 mil.lbs., up 109.737 mil.lbs. from last year. Soymeal futures gained on soyoil in the wake of the data, but both followed soybeans higher. 
 
In export news, USDA did not report any daily export sales on either Monday or Tuesday. Following a snap tender for optional-origin milling wheat issued on Monday afternoon, Egypt’s state grain buyer GASC announced on Tuesday it had purchased 4.409 mb from Romania & 4.527 mb from Ukraine for Feb. 1-15 shipment.  Grain merchants indicated that Tunisia tendered for 4.299 mb of milling wheat, 3.674 mb of durum wheat & 4.593 mb of feed barley & Thailand feed processors were seeking 2.278 mb of feed wheat for Feb. shipment. The Ukraine Grain Traders Union forecast that 2020/21 Ukraine corn exports would decline to 24 mmt from 30.3 mmt last year due 2020 crop output falling to just 28-30 mmt.  China sold 23.860 mb of wheat from state-owned reserves on Tuesday at an average price of 9.72/bu.  Only 16.1% of the wheat that was auctioned was purchased. In a program that buys wheat from farmers for later sale to end users, China has sold a total of 576.9 mb of wheat this year.  Unions representing Argentine grain inspectors & oilseed workers continued their work stoppage on Tuesday, seeking higher wages. 
 
Locally, December-delivery corn basis improved a penny & soybean & wheat basis remained unchanged on Monday. With just two weeks left in 2020, cash markets continue to offer significantly higher bids for January than spot delivery. 
 
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.