Ag Market View for Dec 22nd

SOYBEANS

Soybeans futures traded higher on talk that dry South Brazil and NE Argentina weather could lower crop sizes over 40 pct of the area. Professional traders added to speculative longs before the long Holiday weekend betting that If the South America 2 week forecast is warm and dry prices could trade higher Monday. SH extended its rally from the Nov 8 low near 11.88. Technically, next resistance is near 13.75 then 14.00 then 14.50. USDA estimates South America soybean production near a record 205 mmt versus 193 last year. World crush 327 mmt vs 315 last year. World exports a record 172 mmt vs 164 last year. Of which, South America is 105 mmt vs 92 last year. US is estimated near 55 mmt vs 62 last year. 10 pct drop in South America could add 8-10 mmt (290-360 mil bu) demand to US balance sheet. This would demand a record US 2022 soybean crop.

CORN

Corn futures ended higher. Corn is supported by higher commodity trade on reduced concern that the Omicron virus, while spreading fast, may be weaker than the Delta and Wuhan viruses and may not reduce food and fuel demand. US domestic corn demand remains strong. Weekly US ethanol production was down 3 pct from last week but up 7 pct last year. Stocks were down 1 pct from last week and down 11 pct from last year. Margins remain positive. Weekly US corn export sales are estimated near 700-1,400 mt vs 1,948 last week. Trade over 6.16 could suggest a test of 6.33 and then 6.40. Some feel tightening World corn supplies suggest not to be short corn. USDA estimates South America and Ukraine corn production near a record 212 mmt versus 167 last year. World feed use 750 mmt vs 724 last year. World exports a record 204 mmt vs 177 last year. Of which, South America is 82 mmt vs 57 last year. US is estimated near 63 mmt vs 70  last year. 10 pct drop in South America could add 10-15 mmt (400-590 mil bu) demand to US balance sheet. This would demand a record US 2022 corn crop. There was talk of increase US farmer selling near 6.00. Would assume that US farmer would be sellers on a higher futures. CN22-CZ22 is near +51 and key resistance. Tight US old crop supply supports CN22 over CZ22.

WHEAT

Wheat futures traded higher. WH ended near 8.14. KWH ended near 8.53. MWH ended near 10.27. Wheat futures were supported lower US Dollar and talk that the Omicron virus may be weaker than Wuhan and Delta and may not reduce US food demand. Dry and warm US south plains forecast and lower US farmer HRW crop insurance enrollment is supportive. Close over 8.44 KWH could suggest a test of 9.00. There is talk that Iraq bought 500 mt World wheat. They are expected to tender for another 500 mt next week. Of the total as much as half could be US HRW. There is also talk that in January, Ukraine might announce and export quota on wheat. USDA estimates Russia 2021 wheat production near 75 mmt versus 85 last year. US 45 mmt vs 49 last year. World exports a record 205 mmt vs 201 last year. World feed use a record 160 mmt. World end stocks near 278 mmt vs 289 last year. Of the total, China is 137 mmt. US domestic flour end users are adding to Q1, 2022 needs and just starting Q2. US HRW basis is firming contra seasonally due to higher demand and fear of lower 2022 crop.

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