Jan 04, 2021

Ag Markets Sharply Higher to Start New Year

Argentine crop conditions slipping; strong weekly export sales

Argentine Crop Conditions Slipping

  • The Buenos Aires Grain Exchange estimates corn planting is 74% complete compared to 62% last week and 81% average.
  • The corn crop rating fell to 17% good to excellent from 20% last week and is below last year’s combined rating of 34%.
  • The production forecast is unchanged at 47 million tonnes versus the last USDA projection of 50 million.
  • Soybean planting is estimated to be 87.5% finished, up from 77.2% last week and ahead of last year’s 84.3% completion rate.
  • Crop conditions continue to decline from 49% good to excellent down to 42% last week.
  • The exchange left the soybean crop forecast at 46.5 million tonnes, remaining below the USDA’s projected 51 million.
  • Wheat harvest progressed to 92% complete versus 79% last week and the crop projection remained at 16.8 million tonnes.

FBN’s Take On What It Means: Rainfall over the past week allowed for good bean planting completion in the areas that were behind. The timely precipitation was also helpful for corn, but key growing regions have received just 25-33% of average rainfall for December. The outlook for below normal rains and normal to above normal temperatures for the next two weeks may lead to decreased production forecasts, which is supporting higher prices.


Strong Weekly Export Sales

  • Corn sales of 38 million bushels were up 48% from the previous week, but down 27% from the average of the last month.
  • The largest sales were 13 million bushels to unknown destinations, while there were no reported purchases by China for the week.
  • Weekly soybean sales for 2020/21 were up 97% from the previous week, exceeding expectations at 25.6 million bushels.
  • China bought 22.8 million bushels of beans, which included 21.9 million switched from unknown destinations and 7 million canceled.
  • There were also 11.6 million bushels of soybeans sold for 2021/22, mostly to China and unknown destinations.
  • Wheat sales of 19.1 million bushels were near the top of expectations, and included 2.5 million HRS and 2.4 million white to China.
  • Upland cotton sales of 287,900 running bales were down 30% from the previous week and 24% below the previous 4-week average.

FBN’s Take On What It Means: The strong pace of weekly sales continues. The falling value of the Dollar is helping to keep US export prices competitive. We expect China will continue to be a buyer of large amounts of US ag products in the new year, helping to support higher prices.

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Kevin McNew

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014