Ami Heesch

Jun 1, 2021

Highlights

Big up day in the grain markets on weather worries across the US and the Canadian Prairies. Hot/dry temps are expected to move into the US Midwest this week after a bout of cool to frigid temperatures this past weekend.

 

  • USDA pegged April crush at 170.0 million bushels, below trade estimate near 171.0 mb.
  • Energy markets were stronger with crude oil up 1.67 at 67.98/barrel.
  • US$ down 0.136 at 89.894, the gold market is down 2-3 bucks at 1901 and the CD$ is up 0.00105 at 0.82850.
  • DJIA up 72 at 34602, S&P down 3-4 at 4199 and the NASDAQ up 13-14 at 13762.

     

    Corn

    The corn market took to new heights on forecasts for warm and dry weather conditions across the US Midwest. Prices drew additional support from the strength in the wheat market. South America’s Brazilian corn crop continues to suffer from extended periods of dryness. The July and Sep tickled their 40-cent daily limit during the session.

  • Closes: July at %6.88 ¾, up 32 cents, September at $6.02, up 28 ¾ cents, December at $5.77, up 31 ½ cents. Red Dec closed at $4.98 ¾, up 11 ½ cents.
  • Weekly export inspections were another biggie at 2.0 mmt.
  • Crop progress/ Conditions report is expected to show plantings at 96% complete, and conditions at 70% G/E (64-78).
  • Brazil’s corn crop is expected to be somewhere between 90-95 mmt.  The USDA las estimated their crop at 102.0 mmt.
  • Spreads: N/U 83 ½ inverse, N/Z 111 ¼ inverse, U/Z 27 ¾ inverse, Z/H 6 ½ carry.

     

    Oilseeds

    The soybean market traded higher on borrowed strength in the energy markets and related vegoil markets. Prices drew additional support from weather worries for the newly planted crop. Forecasts suggest a warm/dry outlook for the US Midwest with some areas potentially seeing temps in the 90’s or above by the weekend. There were reports of some areas getting nipped by frost over this past weekend. Some damage and talk of replating beans in northern MN was noted.

     

  • Closes: July at $15.48 ½, up 18 cents, August at $15.00 ¾, up 18 ¾ cents, November at $13.97, up 24 ½ cents. Red Nov closed up 16 cents at $12.69 ¾.
  • The products were firmer with meal up 2-3 bucks and oil up 154 points.
  • Weekly export inspections were reported at 192 tmt
  • Crop plantings are expected to be near 87% complete (85-89).  Conditions mostly likely won’t be published until next week.  Conditions are not expected to be reported with less than half the crop above ground.
  • The canola market traded higher from threats of war/dry weather conditions across the Canadian prairies this week. July closed at $906.00, up 16 bucks and the November closed at 741.50, up 26-27 bucks.
  • Strategie Grains estimated the EU canola crop at 16.82 mmt versus 16.78 mmt previously.
  • Spreads: N/Q 48 ½ inverse, N/X 157 ¾ inverse, Q/X 109 ¼ inverse, X/F ¼ carry, X/H 22 ½ inverse.

     

    Wheat

    The wheat market soared to new highs overnight on adverse weather conditions. Some areas in the Northern Plains were nipped with a bit of frost while areas in the Southern Plains remain quite wet. There has been a bit of business around as well.

     

  • July closes: Mpls t $7.71 ½, up 44 cents, KC at $6.37 ½, up 24 ¼ cents, Chicago at $6.93 ½, up 30 cents.
  • EU wheat prices traded higher, in sympathy with the US wheat market. Gains were limited from improved conditions in the western half of Europe ( from May rain showers).
  • Mpls wheat daily limit is 60 cents ( it got close to tickling the daily limit)....margins have been raised from $2100 per contract to $2300 per contract.
  • Spring wheat conditions are expected to be 45% G/E (42-47), unchanged from last week.
  • Winter wheat conditions are expected to have improved 1% to 48% G/E (46-49).
  • Weekly export inspections were reported at 256 tmt (84 HRS, 64 HRW, 31 SRW, 78 soft white).
  • Spreads: Mpls N/U 3 ¾ carry, Kansas City N/U 7 ½ carry, Chicago N/U 3 ½ carry. The Mpls July sits at a 114 cent premium to the KC July on supply and protein worries.