AgMaster Report - Tuesday, Dec. 29


Wow! The end of 2020 & not soon enough! RIGHT? But the latter half of this year, the CBOT has been the beneficiary of two very powerful S/D fundamentals – an unrelenting La Nina savaging S/A crops & stellar export demand! And the macros have supported as well with record highs in the DJI & Nasdaq (what pandemic?), a deteriorating US Dollar & a resurgent Crude Oil mkt! So it’s not too surprising that Jan Beans corrected 35 cents interday after their $4.00 rally ($8.80-$12.80) since Mid-August with only 4 days left in the trade year! Also, the Argentine dock strike looks to be settled this week – finally, a plethora of exports this morning were either expected/below exp! Meanwhile, S/A’s reproductive period is now!!


While beans & wheat slumped to double-digit losses – succumbing to year-end profit-taking & the imminent settlement of the Argentine Dock Strike, Mar corn STOOD TALL – gaining 6 cents & forging new highs for the move! The mkt is benefiting from positive fundamentals including extraordinary exports, worrisome supply concerns with the S/A drought, a weakening dollar & a soon-to-be strengthening economy! This has resulted in daily dwindling carry-over stocks – now pegged at 5-6 lows! Simply put, “ there’s much more going out the front door – than coming in the back”!And the long-suffering ethanol demand which Covid has decimated due to sharply lower driving – promises to make a big comeback in 2021 when the widespread vaccine dissemination fosters rapid economic growth! And what if the S/A dryness travels to the Northern Hemisphere! There is NO MARGIN FOR ERROR! But given all of this, corn is still historically cheap – still remaining in the lower 25% of a 10-year range! ($3 – $8)!


Mar Wht has lost 30 cents in the past two trading days (635-605) as it corrected an overbought condition – after spillover strength from the bean/corn rally & the Argentine dock strike had rallied the mkt to its October highs! But the probable settlement of the strike this week promised resumed wht shipments out of Argentina & this deflated the mkt! Plus year-end settling-up & still record world stocks also weighed on the mkt! It will continue to coattail its sister mkts – corn & beans – as they have a stronger supply/demand scenario!

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