Morning Comments February 12, 2021

Winter Bales

It was a very quiet overnight market in the grains. Weekly export sales were out yesterday morning and once again showed good numbers. Corn sales were at 57Mln bu and soybeans at 29.6Mln bu. The amount of unshipped sales remains extremely large; current corn open sales are at 1.416Bln bu and soybeans at 357Mln bu. Unshipped corn sales are 290% higher than last year and beans are 190% above a year ago. There was a small export corn cancellation reported earlier in the week, which did ripple concern through the trade. One of the biggest fears of the corn longs is that some of these open corn sales get cancelled, which would sharply lower the market. 

Arctic weather is taking its toll on logistics and energy supply, and forecasts don’t provide much relief until mid-next week. Spot natural gas prices have spiked to levels not seen in years. Next-day gas at OneOk, which serves much of the Midwest, spiked to $60.28 Dth at close yesterday. There have also been huge spikes along the Eastern seaboard. It is very likely that natural gas curtailments are, or will be, occurring for those that don’t have un-interruptible service contracts. 

The price action this week post-report has been volatile, which will continue. At face value, the WASDE supply/demand report was not bullish, therefore price selloff ensued to test primary and secondary levels of technical support. We’ve now re-defined the trade range to lower than that, prior to the report. We are still in a demand led, bullish market, but the market has just cooled off until the next data dump. 

Opening Calls:

Corn: steady

Beans: up 1-2c