Roundup: CBOT agricultural futures close mixed

0 Comment(s)Print E-mail Xinhua, February 14, 2021
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CHICAGO, Feb. 13 (Xinhua) -- CBOT agricultural futures closed mixed after a wild week as the U.S. Department of Agriculture (USDA) failed to adjust U.S. and world supply and demand in its February World Agricultural Supply and Demand Estimates (WASDE) report, Chicago-based research company AgResource noted.

CBOT corn futures ended weaker following the USDA's February WASDE report. The market throughout 2020-2021 has followed USDA balance sheet guidance, which implies that WASDE is unlikely to boost U.S. exports above 2.6 billion bushels until South American supply can be confirmed. This in turn has transitioned the market from one driven by demand to one driven by supply, AgResource noted. Weather in South America and U.S. seeding intentions will dominate price direction into early spring.

Nevertheless, AgResource remains bullish, as crop stress in Argentina will continue for another 10 days, and crop ratings have failed to improve despite mild temperatures and improved January rainfall.

CBOT wheat futures ended slightly lower amid a lack of market-specific news. Ongoing massive uncertainty over Russia's floating tax June onward has eliminated forward price guidance from the Black Sea, the world's largest wheat exporting region.

Wheat news will remain absent, with weather remaining unimportant into April. Wheat will follow row crops over the next 30-45 days, which in turn places more importance on weather and yields in South America.

Moving forward, wheat will be a supply-driven market, with yield losses needed to push July CBOT above 6.50 dollars, AgResource suggests. However, tolerance for exporter yield loss in 2021 will be the lowest in years. Weather has an oversized influence on price direction from April onward. In the medium-term, AgResource is not expecting seasonal weakness for wheat until late spring.

CBOT soybeans marked modest gains for the week. The February WASDE report disappointed the trade as the USDA raised the export forecast by 20 million bushels and lowered the end stock forecast to 120 million bushels. This was the tightest balance sheet ever published in February. But the hike in exports fell short of expectations.

The Brazilian harvest is advancing but is still well behind a year ago. CONAB reported that 4 percent of the soybean crop had been harvested last week compared to 18 percent a year ago. The Brazilian soybean ship lineup has swelled to more than 12 million metric tons, with more than 8.5 million metric tons scheduled for February.

With Chinese and Brazilian traders taking off for holidays, AgResource looks for CBOT soybeans to transition to a range bound market between 13.25 dollars and 14.00 dollars. Enditem

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