Jim Warren

Jul 7, 2021

Highlights

 

Grain markets found some support after early-morning weakness today.  The petroleum complex was weaker on follow-through selling from yesterday’s reversals and the Dollar Index continued with its stronger trend but did weaken into the close.

 

  • The Fed released minutes of their June meeting which hinted that they expect more gains in the economic recovery to meet their targets.  The S&P responded by making new highs.
  • China will be starting a pilot program to insure pig production in some counties, to help stabilize production and help guard against risks the farmers there face.
  • Dow Jones futures currently up 97 at 34557, US$ up 0.119 at 92.665, and Crude Oil down $1.35 at $72.02.

 

Corn

 

The corn market held support at the bottom of its wedge pattern, but the 20 day moving average in the December contract has crossed below the 50 day for the first time in the rally from last August.

  • The noon run of weather models appeared to reduce forecasted precipitation amounts but kept the heat at bay, at least through the 6-10 day period. 
  • Some analysts expect Brazil’s corn exports in July to be about half of last year, due to the late planted crop and adverse growing conditions, but the high domestic price of corn is expected to encourage larger acres for next year’s crop.
  • Cash ethanol prices reportedly dropped 14 cents/gallon yesterday and nearby futures declined another 3 cents today.
  • Spreads: U/Z 11 ¼ inverse, down 1; and Z/H 7 ¾ carry, down 1 ¼ .

 

Oilseeds

 

November soybeans gapped higher in the overnight session and held on to gains throughout the session, but had only recovered about ¼ of yesterday’s losses by the close.

 

  • ABIOVE raised their estimate of Brazil’s soybean exports this year by 1mmt to a record 86.7mmt (USDA at 86mmt).
  • CIF basis was higher today; there were rumors circulating of China interest in our old crop soybeans.
  • Spreads: Q/X 39 ¾ inverse, up ½,  X/F 4 ¼ carry, unchanged and X/H 15 cent inverse, up 1 ¼ cents.

 

Wheat

 

Wheat in Chicago and KC managed to close nearly unchanged, aided by strength in the MPLS contract.  Winter wheat harvest continues to be intermittently stalled by frequent spotty rains and high humidity. 

 

  • 50% of the Spring Wheat crop is rated Poor/Very Poor, ditto for North Dakota’s crop, with little to no relief in sight.
  • Thailand bought about 65tmt of feed wheat, optional origin, for August 10 – September 10 shipment.
  • The CCC issued a tender for 25tmt of HRW for donation to Ethiopia.
  • Spreads: Mpls U/Z 7 ½ cent inverse, Kansas City U/Z 11 ¼ carry, Chicago U/Z 7 ¾ cent carry.