Morning Comments February 16, 2021

Sillouette Landus Cooperative Silo Sunrise

It’s hard to not lead with the weather this morning. The bitterly cold temperatures are really affecting livestock, energy, and transportation. Multiple ethanol plants and soy crush plants have been curtailed or cut off by their natural gas suppliers. Commercial rail traffic is in gridlock with locomotive air pressure problems and extremely cold rails that result in reduced speed precautions. We’re estimating that a minimum of seven days will be lost on transits due to this situation. Needless to say, end users’ inventories will be depleted and there will be a lot of hungry mouths by later this week. 

Markets re-opened last night following the holiday yesterday. Prices are higher at the morning pause, but a long way from earlier levels. HRW wheat areas are very concerned about winterkill following these sustained below-zero temps in the southern plains. China is on New Year’s holiday this week, so it will likely be a quiet period for export sales announcements. Weekly export inspections will be out later this morning. The USDA outlook forum is this week, so we should see baseline acreage estimates and supply/demand forecasts out by Friday. The NOPA January soy crush report will be out today.

South American weather remains wet for much of Brazil, further delaying soybean harvest and second season corn planting. Palm oil has fully recovered the price retraction last month and is now at 10-year highs. Soy oil followed, as a new all-time high of 47c was touched overnight. Australia is one of the few beneficiaries of recent weather as they harvest a record large wheat crop, estimated at 33.3MMT.

Opening Calls:

Corn: 2-3c higher

Beans: 10-12c higher