On The Money Grain Commentary 12-2-21

If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our blog.

Corn Outlook:

The grains are seeing an increase in volatility from concerns of the new Covid virus, Omicron, possibly causing new lockdowns disrupting the economy, and the Fed’s attempt to quell fears of rising inflation by tapering asset purchases more quickly. In addition, the rising dollar and weaker crude oil are leaving traders in a quandary. Looking at corn, harvest is complete which puts the focus on weather in South America and exports. Currently, conditions are favorable in central Brazil while there is some dryness causing stress in the south. Meanwhile, exports have risen the past three weeks with inspections last week at 30.1 MB. However, they must average 54.0 MB each week to reach USDA’s projection of 2.5 BB, which will be a chore to achieve.

Bean Outlook:

News in soybeans is mostly sparse. Planting is winding down in Brazil with conditions generally favorable except for dry areas in the south. These are being monitored closely and could stir up some excitement later if it continues. Exports were strong last week at 78.7 MB with China taking 64 percent of shipments. However, the pace of shipments has fallen 8 percent since early this month. As mentioned in previous comments, shipments generally peak in November and decline 65-85 percent through the remainder of the marketing year. Right now, traders will likely stay nimble until an event triggers their interest.

Wheat Outlook:

For weeks, wheat has been underpinned from shrinking global stocks but that seems to have run its course as prices have tumbled. What has been overlooked is the fact that Egypt continues to accept tenders from Russia and Romania rather than the U.S. Last week, export inspections were meager at 9.2 MB. They must average 17.8 MB on a weekly basis to reach USDA’s target of 860 MB. The last time shipments were of this magnitude was in late September. Long story short is that they have a lot of catching up to do. In other developments, the crop rating for winter wheat was unchanged last week at 44 percent in good-to-excellent condition and compares to 46 percent a year ago. Next week, weather in the southern Plains is forecast to be dry.

Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.