John Wesley Willson

May 6, 2021

Highlights

The Dow reached an all-time high, propelled by strong earnings and jobs data. Commodity markets remain firm as inflation concern, demand, and weather drive an array of products higher.

 

  • The Biden administrations recent tax proposal is said to eliminate a longstanding tax break for landowners that defers capital gains taxes on the proceeds from a sale, while allowing the money to be used to purchase other real estate.
  • India has reported the highest spike in Covid-19 cases in a 24-hour period, with 412,262 new cases according to the Indian Health Ministry.
  • Outside markets as of 2:26 PM Central: June crude oil at $64.76 down $0.87; U.S. Dollar index at 90.9390 down 0.3690; Gold at $1813.80 up $29.50; Dow at 34408.62 up 178.28 points. 

 

Corn

Corn traded higher throughout the course of Thursdays session, with new contract highs set in both the old a new crop months. Corn futures are now trading at levels not seen in the past 8 years. Prices continue to be driven by dryness in South America, as well as domestically. The strength in the market has been most notable in the new crop months, as the market looks to buy additional acres.

  • Closes: July at $7.18’6 up 10’2; Sep at $6.45’4 up 14’4; December at $6.25’4 up 20’6.
  • Weekly export sales came out to 137,400 mt for 20/21 and 106,200 mt for 21/22.
  • Spreads: N21/U21 72’6 inverse, N21/Z21 92’2 inverse, Z21/H22 2’4 carry.

 

Oilseeds

November Soybean futures reached new contract highs over the course of trade Thursday, while old crop July futures remain just below the highs set last week of $15.74’6. July oil had a nice day, closing 0.89 points higher at 64.35. This level represents the upper limits of the trading range that we have seen so far in July bean oil. The drivers of the market are very similar to corn in that dryness domestically is supporting futures. There is also an acreage battle in play and so the strength in corn has helped support new crop soybean futures.

 

  • Closes: July at $15.69’4 up 27’2; Aug at $15.15’6 up 24’2; November at $14.09 up 26’2.
  • Weekly export sales came out to 165,300 mt for 20/21 and 192,900 mt for 21/22.
  • Board crush continues to decline, with meal unable to breakout and retest the highs made in January. The crush was down 11’0 today, putting July at 78’4.   
  • Spreads: N21/Q21 54’0 inverse, N21/X21 160’4 inverse, X21/F22 3’0 inverse.

 

Wheat

 

 Wheat futures saw stronger trade, although not to the same degree as corn and soybeans. Wheat markets have been under moderate pressure due to timely rains; however, prices will remain supported as corn continues to set new highs. Minneapolis wheat did manage to set new contract highs in both the old and new crop contracts as it battles for acres this spring.

  • July closes Chicago at $7.53’2 up 8’6; Kansas City at $7.26’6 up 9’6; Minneapolis at $7.90’4 up 8’4.
  • The weekly export sales for all wheat came out to -95,600 mt for 20/21(a marketing year low) and 399,600 mt for 21/22.
  • The July wheat/corn spread is now at 9’4.
  • Spreads: Chicago N21/U21 1’0 carry, Kansas City N21/U21 4’0 carry, Minneapolis N21/U21 4’4 carry.