Wheat markets moves were mixed in Friday trading, while corn, soybeans and canola posted some big gains.
In fact, CBOT agricultural futures stayed bullish in the past week as the world was awash with liquidity, with a sinking U.S. dollar, and the COVID-19 vaccines may allow the return of normality in the second quarter of 2021.
A Chicago-based research company said it believes agricultural futures are likely to end 2020 on a bullish note.
CBOT corn ended the week higher and broke through near-term resistance at 4.30-dollar basis spot.
The market is turning more bullish as Argentine crop health worsens and forecasts maintain acute dryness into early 2021.
And even more weather premium will be added in 2021 if South American drought persists.
World corn demand is already being shifted from Argentina to the United States on a near daily basis.
An equally important issue is that seeding delays in South America will delay the arrival of their exportable surplus until mid-summer.
Experts Ag predicted that the United States will continue to dominate trade, and ultimately U.S. corn exports will reach 3.0 billion bushels.
Based on this, U.S. 2021 planted corn area should be kept at 91-92 million acres.
CBOT wheat ended weaker as the market corrected last week’s sharp rally.
Russia confirmed that it will place a 31-dollar per metric ton tax on all wheat exports beginning Feb. 15.
This initially was taken as bearish by the marketplace as a flood of Russian exports were expected in the next 8 weeks.
But Russia’s tax will eventually act to lift world wheat FOB offers.
Experts Ag is expecting a modest jump in U.S. wheat export demand beyond the winter.
But the odds of reduced yields in Russia and across the U.S. Plains are elevated on adverse autumn weather.
In fact, Black Sea weather maps have almost no precipitation forecast across Russian wheat areas.
Warmer weather is forecast to follow the recent cold snap, but with the dry conditions and lack of snow cover, winter loss estimates are still doing the rounds.
US conditions are also very dry, and with focus shifting towards winter wheat acreage in the January report, production ideas are moving forefront and centre.
On the U.S. soy complex hand, was marked a week of strong gains.
January soybeans pushed above the 2016 high and marked the best weekly close since 2014
Record large U.S. soybean crush and exports are at the forefront of the rally with dryness in Argentina being closely monitored.
The U.S. soybean supply is being depleted at a record rate, while world end users fear that the already delayed South American crop may not be large enough to fulfil China’s February import need.
Meanwhile, a combination of weak peso, new export taxes, and the port strike is severely limiting Argentine soybean/grain export volumes.
U.S. exporters have sold 90 percent of the U.S. Ag annual export forecast.
The need for U.S. soybean demand rationing is acute.
Experts target March soybeans at 14 dollars per bushel, but a much stronger rally could unfold if South American crop estimates decline.
In fact, Argentina’s weather forecasts remain very dry into the New Year, with the market’s worries shifting down from Brazil, where there is better moisture.
Brazil’s soybean planting were pegged at just over two-thirds complete by the Bolsa late last week, with dry conditions and political concerns slowing fieldwork.
Argentine port strikes are dragging out, with continued 24-hour extensions into the weekend, and another meeting on for today (Sunday in Argentina) to determine if they continue.
