GAP State-of-Play for Week Ending Jan. 22, 2021

GAP State-of-Play — Week Ending Jan. 22, 2021

 

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

  • Biggest question on everyone’s mind that is long this market: Who is the next buyer under this market if momentum/fund liquidation continues?
  • Escalator on the way up, elevator on the way down: so goes the nature of bull or bear momentum price swings.
  • Soybeans down 105¢. Soymeal down $41.60. Soy oil up 42 points. Corn down 31¢. Chicago wheat down 41¢. Kansas down 29.75¢. New highs in corn-wheat spread. New highs in KW-W spread.
  • First lower weekly close for soybeans and corn since the beginning of December.
  • Fund length remains ample over this market — especially in soymeal given that narrow exit and entry door/window for this market. Watching SM very closely this week. For soybeans — will China (or other world importers for that matter) be a big enough bid if funds are there to sell into what will be a record Brazil soy crop (only o/s question is the degree to which) and lack of weather threat for Argentina.
  • Confidence on the rise for both Brazil and Argentina production… very good rain coverage for both in the 5-day.
  • Argentina truck strike — remains in the background but is something to keep an eye on. However, the Fernandez Administration is very aware of the necessity to keep ag moving forward and more importantly, exports to gather export tax revenues.
  • China crush margins have been hit here of late and the New Year looms 11 February. Buying interest shifts for U.S. soybeans shift to new crop (Q4).
  • Month-end on Friday (crazy as that may seem — how fast time flies).
  • USDA reports — all “per schedule” with a full week of trade ahead.

To read the full GAP State of Play for the week ending Jan. 22, 2021, click here.

 

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