CHICAGO, Nov. 14 (Xinhua) — CBOT agricultural futures staged a mixed performance in the past week, while technically the agricultural futures are in a bullish position with the value of the U.S. dollar likely to decline.
Meanwhile, Chinese economic demand looks to stay strong, and Chicago-based research company AgResource predicted that broad commodity prices will stay bullish.
CBOT corn ended slightly higher following the bullish November crop report and another uptick in weekly ethanol production. Long-term price direction centers on U.S. export demand, AgResource noted. U.S. Department of Agriculture (USDA) projected U.S. corn exports in 2020-2021 to be a record large 2,650 million bushels, and this number may swell to 2,900-3,000 million bushels if Argentine production falls below 45 million metric tons due to La Nina-based drought.
The odds of adverse weather for Argentina and southern Brazil are rising. Model guidance across Argentina is drier than normal into mid-December.
The CBOT is awaiting China’s return for U.S. corn with hope of new sales in coming weeks. AgResource suggested it is closely following South American weather and Chinese demand for world corn to gauge upside price potential into March.
U.S. wheat futures ended weaker. Russia announced its long awaited 2020-2021 grain export quota system this week, and the quota is viewed as bearish as Russian exporters will be allowed to sell and ship wheat without restriction over the next 100 days. The arrival of Aussie supply will weigh on Black Sea shipments into Asia in early 2021.
The wheat market lacks compelling fundamental input into spring as North Hemisphere crops enter dormancy. A lasting break is unlikely as the global corn outlook is bullish and as world wheat importer demand remains stout. AgResource predicted a choppier price pattern ahead.
Poor crop establishment across the U.S. Plains and Southwest Russia mandates favorable spring weather if a lasting bearish pattern is to develop in mid-2021.
CBOT soybeans marked another week of gains, following a bullish USDA monthly crop report. Nearby soybean futures marked a weekly close above 11.00 dollars, the first since July 2016, AgResource noted.
The November Crop Production and the World Agricultural Supply and Demand Estimates (WASDE) reports were viewed as bullish. USDA National Agricultural Statistics Service surprised the trade with a 1.2-bushel-per-acre (BPA) yield cut, which shrank U.S. crop size by nearly 100 million bushels. U.S. soybean stocks are projected to fall to just 190 million bushels, down from 909 million bushels two years ago.
Brazilians have completed 94 percent of soybean planting. However, crop maturity is far behind normal on delayed germination.
AgResource is bullish on soybeans, suggesting a stronger rally would unfold if normal weather does not benefit South American crops. Market volatility will be high heading into April 2021.