Ami Heesch

Feb 18, 2021

Highlights

The row crops took a bit of a hit from expectations for record plantings for 2021/22 and lack of Chinese buying interest in US good their first day back on the markets. The wheat market showed strength from weakness in the US$, decent demand for global wheat. 

 

  • USDA Ag Outlook Forum finishes up tomorrow with S&D balance sheets.
  • March options expiry takes place at the close of business tomorrow.
  • First Notice Day for March futures is Friday, February 26th.
  • The energy markets are mostly lower with crude oil d own 1.13 at 60.01/barrel.
  • The US$ down 0.392 at 90.559, the gold market is up 1-2 bucks at 1773/ounce and CD$ up 0.00135 at 0.78885.
  • DJIA down 85 at 31526, S&P down 10-11 at 3917, NASDAQ down 61 at 13904.
  • Weekly export sales report is scheduled for release tomorrow morning.

                                                                                   

    Corn

    Corn prices were on the defensive from increased acreage ideas and SA harvest activity, although prices did gather support from decent demand and the fact that the SA harvest is moving along despite adverse weather conditions. The market awaits the S&D balance sheets from the Ag Outlook Forum. The Ag outlook estimate planted acres for 2021/22 at 92.0 million versus trade estimate at 92.9.

  • Closes: March at $5.50 ¼, down 2 ¾ cents, July at $5.39, down 1 ¼ cents, December at $4.59 ¼, down ¾ cent.
  • Gulf premiums were 3 cents firmer for Feb and unchanged for M/A/M.
  • Average trade estimates for weekly export sales tomorrow: 800 tmt-1.4 mmt.
  • Weekly ethanol production report showed a 26k barrel per day reduction to 911k barrels per day. Stocks rose 501k barrels to 24.3 million barrels.
  • Hearing that ethanol margins are thought to be a bit more positive from Aug-Oct, than they are currently are.
  • There are concerns about the ability for Brazil to get their 2nd corn crop planted in a reasonable timeframe to see production levels remain at or near levels seen in past years.
  • Spreads: H/K 1 ½ inverse.......K/N 9 ¾ inverse........Z/H 7 ½ carry.

     

    Oilseeds

    The soybean market traded lower on big planting ideas and improving harvest activity in SA, along with expectations for another record crop out of Brazil. Prices drew additional pressure from lack of Chinese buying interest on their first day back in the game. The market awaits the Ag Outlook updated balance sheets, which are expected to be released tomorrow. Canada’s canola acres for 2021/22 are now expected to be up 4% versus 6%, which was thought earlier. 

     

  • Closes: March at $13.75, down 8 ¾ cents, July at $13.64 ¾, down 8 ½ cents, November at $11.86 ½, down 2 ½ cents. The products were mixed with meal down 5-6 bucks and oil up 14 points.
  • Gulf premiums were unchanged for Feb, 1 cent firmer for Mar, unchanged for Apr and 1 cent firmer for May.
  • Average trade estimates for weekly export sales tomorrow: 350 tmt-10.2 mmt for beans, 100-350 tmt for meal and 5-25 tmt for soyoil.
  • The USDA Ag Outlook estimated the 2021/22 plantings at 90.0 million versus traded estimate of 89.4 million.
  • Canola prices traded higher on a bout of short covering from tight supplies.
  • While there are ideas of the need to pull soybean imports from the extremely tight old crop stocks, although there is some caution about the need to continue importing more than the forecast 35.0 mb because of the significant increase in acres for this year.
  • Brazil’s harvest moves along albeit noting delays from rain events across the area.
  • Spreads: H/K 1 ¾ carry.......K/N 12 inverse......X/F 4 ¾ inverse........X/H 30 ¼ inverse.

     

    Wheat

    Wheat prices took off again today on the recent cold snap and decent global demand for wheat. The USDA Outlook Forum did little to provide direction as their estimate came in lower than the average trade estimate and stays at fairly low acres from price advantages from corn and oilseed crops. Prices drew additional support from the weakness in the US$ and tightening European supplies.

     

  • March closes: Mpls at $6.31 ¾, up 8 ¾ cents, KC at $6.36 ¾, up 12 ¼ cents and Chicago at $6.62 ½, up 18 ½ cents.
  • The USDA Ag Outlook Forum estimated the 2021/2 planted acres at 45.0 million compared to the average trade estimate of 45.5 million. Spring wheat acres for the US are expected to be unchanged to slightly lower at this point, although spring weather will carry more weight in the farmers planting choices.
  • Paris milling wheat
  • Russian wheat production reduced from 77.7 mmt to 76.2 mmt citing poor weather conditions and reduced acreage planted from implementation of export taxes.
  • Russia’s spring wheat crop estimated at 22.6 mmt versus 23.6 mmt previously, with area planted to be reduced from upcoming export taxes.
  • Pakistan seeks up to 300k tonnes of wheat with no other details provided at this time.
  • South Korea (NOFI) bought 65k tonnes of feed wheat at $309.0/tonne C&F for July.
  • Spreads: Mpls H/K 11 carry.....Kansas H/K at 6 carry......Chicago H/K 2 ¾  carry. KC & Chicago gained on Mpls.