Morning Comments January 7, 2021

Rogator At Sunset

Managed Money Funds were corn/soybean buyers again yesterday, and are now estimated to be holding record large long positions in soybeans and soybean oil. Long corn position would be close to record high. Weekly EIA report yesterday showed both ethanol production and stocks mostly unchanged from prior week. Stocks at 23.284MBLS is at the high end of long term ranges and is the primary reason for negative ethanol margins. Expectations are for stocks to potentially move higher during the slow domestic Q1 driving season. 

Markets have turned lower this morning following a very disappointing export sales report. Only 29.5Mln corn and 1.4Mln beans were sold, easily the lowest weekly sales report this marketing year. There was actually a large cancellation of existing soybean sales…to the tune of 29Mln bu. Very interesting development, given the fact that Argentina is not yet loading any boats. Maybe due to holiday shortened trade week….or maybe world prices have gone high enough for now. Reminder that highly anticipated WASDE report is upcoming on Jan12 at 11am. Markets are likely to stay volatile and choppy ahead of the report. No new developments in Argentina on strike situation. 

Opening calls:

Corn down 3-5c

Beans down 10-15c