Rose on Grain – CME Corn, Wheat, and Soybeans, Finish Major Report Week Higher

November 15, 2021 4:07 pm
Published by

Louis W. Rose IV

Corn:

CME Dec corn futures gained 24¼ cents last week to finish at 577¼.  Last weekend our proprietary models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved correct. 

The corn market finished higher, despite weakening US export sales data and favorable production expectations across South America, on continued weak shipment data, on concerns regarding the remainder of the US crop that remains standing.

In its Nov WASDE report, the USDA trimmed its 2021/22 domestic carryout projection Vs the previous report at approximately 1.49B bu, which remains bullish.  Aggregate world carryout for 2021/22 was projected 1% higher Vs Oct at almost 12B bu.

Domestically, major US producing regions are expected to see mostly favorable harvest weather this week for remaining harvest operations.  For the week ending Nov 8 the US crop was estimated at 84% harvested, up 10 percentage points Vs the previous week and 6 percentage points ahead of the rolling 5-year average pace.

Net export sales and shipments were lower Vs the previous sales period at approximately 42K and 28M bu, respectively.  Sales were again head of the pace required to meet the USDA’s latest projection while shipments were again well off the pace requirement.  The US is 51% committed and 10% shipped Vs the USDA’s target.  Sales are well ahead the average expected pace for this point of the season; shipments are off their expected pace.

Internationally, Conab raised its projection of Brazilian production significantly in its Nov Crop Survey report.

CFTC data for the week ending Nov 9, will not be published until Monday, Nov 15, per this week’s Veteran’s Day holiday.

For this week, the weekly technical analysis for and money flow into the Mar contract remains supportive to bullish, with the market now overbought.  International weather and US export data appear likely to be market moving factors this week for corn, wheat, and beans.

Soybeans:

CME Jan soybeans gained 38¾ cents last week to finish at 1244¼.  Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved correct. 

CME soybeans finished significantly higher, despite a continuance of strong US export data, on US harvest progress and yield reports and strong expectations for new crop across South America.

In its Nov WASDE report, the USDA projected 2021/22 domestic carryout slightly higher Vs the previous report at approximately 340M bu, which remains a bullish figure.  Aggregate world carryout for 2021/22 was forecast 1% lower at 3.8B bu.

Domestically, as with corn, major US producing regions are expected to see generally favorable harvest weather for the coming week.  Harvest across the southern states continues, with mostly strong yields continuing to be reported.  For the week ending Nov 8 the US crop was estimated at 87% harvested, up 7 percentage points Vs the previous assay period and 1 percentage point off the rolling 5-year average pace.

Net export sales were lower while shipments were dramatically higher Vs the previous assay period at approximately 47M and 136M bu, respectively.  Sales and shipments were again well ahead of the pace required to meet the USDA’s latest projection.  The US is 60% committed and 26% shipped Vs the USDA’s downwardly revised target.  Sales are notably ahead the average expected pace for this point of the season; shipments are also ahead of the expected pace.

Internationally, weather across South America continues to be near excellent for development of the new crop.  Conab raised its projection of Brazilian production significantly in its Nov Crop Survey report.

For this week, the weekly technical analysis for and money flow into the Jan contract remains bearish.

CME Wheat:

CME SRW Dec futures gained 50½ cents last week at 817.  Last weekend our models predicted a finish on the week that was to be near unchanged to higher Vs the previous Friday’s settlement, which proved correct. 

CME futures finished notably higher, despite disappointing US export data (especially for SRW) and stronger Us currency, in sympathy with corn and on bullish grain data releases out of Canada. 

In its Nov WASDE report, the USDA projected 2021/22 domestic carryout effectively unchanged Vs the previous report at around 583M bu.  Aggregate world carryout for 2021/22 was projected slightly lower at 10.13B bu.

Domestically, private estimates of planted area continue to come in higher Vs USDA; however, we expect SRW acreage across the eastern Cotton Belt to be off Vs last season.  For the week ending Nov 8 sowing of the US crop was estimated at 91% complete and 74% emerged, which is near on par with the rolling 5-year average pace.  SRW producing regions are expected to see showers this week while HRW areas are expected to see a continuance of mostly dry conditions, which is less than desirable.

Net export sales were lower while shipments were higher Vs the previous assay period at approximately 11M and 10M bu, respectively.  Both sales and shipments were off the average weekly pace required to meet the USDA’s official target.  The US is 57% committed and 38% shipped Vs the USDA target.  Sales are modestly ahead of the average long-term pace for this point of the season while shipments are significantly off their expected pace.  SRW sales were notably lower at less than 260K bu.

Internationally, weather across the Black Sea region (especially Russia) remains generally favorable for winter crop development.  It continues to look as if Russia will expand it export tax continue to circulate.  Elsewhere, data out of Canada relayed bullish sentiment across its grain sector.

For this week, the weekly technical analysis for and money flow into the Mar contract remains supportive to bullish, with the market again overbought.  The market has convincingly breached 800, which is now initial support.

Have a great week!

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    This post was written by Louis Rose