Early Market Talk January 7, 2021


Had to look twice this morning. Markets in the red at 0600 with CH21 $4.90 ¾ off 4 ¼¢. SH21 7 ¾¢ lower at $13.57 ½. Decent volume of near 38 and 40K respectively on these two contracts. Chi and KC wheat gibing up some ground as well.

Huge jump in corn open interest yesterday of over 35K contracts. Soybean OI up a more modest 14,975.

Dow futures made a new all-time high yesterday at 30,912. Another new high overnight at 30,939 and just clinging to higher trade at this writing.

USDA supply / demand, final production numbers and qtrly stocks next Tuesday. Trade guessing corn and soybean yields slightly lower. Average guess for ending stocks at 139 mln bu for soybeans (currently at 175 mln bu) and 1,599 mln bu of corn (current estimate 1,702 mln bu). Smaller SA production of corn and soybeans as well.

All the above baked in the cake. A classic buy the rumor sell the fact setting itself up?

Dalian corn futures at one point overnight up the equivalent of 26¢. Settled roughly 8¢ on the night. Did make a new all-time high price eclipsing the high set in September of 2014.

Yesterday sent an email showing price parallels this year with the 07/08 crop year. Rally started about the same time. if you did not see that worth a look. Play some what if scenarios on current and future hedge positions.

CHCK trading 1 ¼¢ carry this morning. Total OI on the CH21 contract of 832K contracts. Some big liquidation ahead. Goldman roll the first 5 trading sessions in Feb.

Export sales report at 0730. Trade looking for corn sales of between 600 – 1,200K tonnes. Soybean sales between 400 – 800K.

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