Morning Comments January 22, 2021

Grain Corn Pile Closeup

Weekly export sales just came out this morning and were very impressive. 56.6Mln corn, 66.8Mln beans, and 11.5Mln sorghum were sold last week. Mexico and Japan bought the majority of the corn, while China bought the majority of the beans and all the sorghum. Outstanding sales volumes (sales made but not yet shipped) are very large and considerably larger than those balances a year ago. Corn is at 1.15Bln (compared to 434Mln a year ago), beans at 514Mln (228Mln a year ago), and sorghum at 129Mln (14Mln a year ago). Unshipped sales can be bought back, or canceled, but with the whole world tight on feedstock supplies would expect the sales to be loaded and shipped. Majority of cash traders hold the view that USDA is underestimating exports and subsequent carry-outs, particularly on corn. 

Talk this am of a new swine fever strain in China related to illicit vaccines….is concerning. Appears to be limited in scope thus far (publicly), but pay close attention to this one. Any curtailment to China feedstock demand will have price implications. Also, wire story this morning that China failed to purchase the agreed-upon amount of US good under phase 1 of the trade deal. In 2020, China purchased $100Bln of US goods vs the $173Bln agreement. 

Other outside market influencers this morning are resurging Coronavirus cases in China and better weather in South America. Brazilian truckers planning to initiate strike Feb1. 

Opening calls:

Corn: down 4-6c

Beans: down 15-20c