GAP State-of-Play for Week Ending Fri., Feb. 5, 2021

GAP State-of-Play — Week Ending Feb. 5, 2021


Welcome to this week’s snapshot of the global grains and oilseeds industry. For the full report, click link at the end.


  • Corn + soy complex — a week of treading water ahead of Tuesday’s Feb WASDE: soybeans and soymeal minor losses on the week. BO and corn minor gains on the week.
  • On the week — wheat was down 21.75¢ with KW down 12.75¢. KW-W spread continues to narrow. Corn-wheat spreads new highs. W spreads in bear-mode to close out the week.
  • Fund length – remains v. ample in corn, soybeans, soymeal, soy oil and KW and MW…big jump in corn open interest this past week.
  • Index roll — H21 exposure started on Friday, extends thru most of this upcoming week.
  • USD higher. Baltic freight lower.
  • Persistent talk of Brazil February soy cargoes to China being washed out/rolled to May or replaced with U.S. PNW March.
  • China heads to the New Year holiday on 11 February…more talk that Sino will release soy reserves as needed. However, domestic soymeal pricings have been v. weak and crush margins v. poor. China has been a persistent talk point for U.S. demand this past week.
  • China U.S. corn demand the major headline this past +week — just how deep is the bid or are they now full up for 2020-21? What does 2021-22 demand look like? If its volume is similar to this year, I would argue the CZ21 forward portion of the curve is nicely discounted.
  • Argentina corn premiums – trend lower for much of the week. Renewed talk of higher export taxes. Farmer selling picks up. Low-cost FOB origin April forward.
  • Europe soymeal, corn and feed wheat demand remains v. low vs estimates/forecasts
  • Argentina soymeal premiums (and Brazil) trended lower/sharply lower towards the end of the week as farmer selling continues: estimated at 71% for last year’s crop and 7% for this year (27% LY).
  • USDA reports — all per usual this week with the day of the big show on Tuesday, 9 February. We’ll see then just what exact numbers the market (futures) is trading vs U.S. ending stocks. Comments and thoughts about this report in the State-of-Play. Key point will be that the world corn supply cushion will be similar to 2012-13 – however, U.S. corn ending stocks will be much larger than those in 2012-13. Key difference.
  • REMINDER: world consumes 1MMT of soybeans/day. Corn (w/out China) = 2.37MMT/day — world supply cushion will be adjusted by a day with these consumption levels.
  • February: sets U.S. crop insurance rate – will be a major key to planting decisions. Month-to-date: corn = 450 (+62¢ vs LY). soy = 1156 (+239¢ vs LY). Plant baby plant.
  • CONAB will be out with its latest Brazil numbers on Thursday (11 February).


To read the full GAP State-of-Play for the week ending Feb. 5, 2021, click here.


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