Wheat
- Basis should be covered through Q4 and Q1. Futures through mid-Q2
- Drought in eastern Ukraine, southern Russia and the SW Plains continues to plague the area
- Probability increases of strong La Nina that lingers in spring of 2021 — dryness in HRW wheat region
- Major exporter balance sheet that is tight with stocks to use expected to be the lowest since 2007-08; Exporting countries hold on 25% of stocks net of China’s 49% of all stocks
- Exporting countries hold only 25% of stocks net of China’s 49% of all stocks
Oils
- Coverage should be through Q3.
- DTN:Â World can ill afford a big hit to South American soybean production, with U.S. soybean ending stocks likely to reach a dangerously low pipeline supply if demand continues unabated
- Bullish vegetable oil rally is alive and well
- Palm & SBO futures reach multi-year highs
- The global stocks/use ratio for soybeans is now forecast at 16.12%, the lowest percentage since the U.S. drought year of 2012-13
- Mostly below normal precipitation pattern is expected to continue in South America–increasing concern of extended dryness for top producer province of Mato Grasso
- Palm seeing tight stocks and lower production; usage ratio at low going back to 90s
- World edible oil usage ratio at 20+ year low
