Bryant Sanderson

Jul 19, 2021

Highlights

 Equity markets were sharply lower today with the Dow over 900 points lower at one point. The energy markets were sharply lower as well with the WTI crude oil price over $5/barrel lower. The delta Covid variant spreading throughout the US and world is raising concerns about the global economy slowing down again. Airline stocks were hit the hardest, down 5%.    

  • The Covid-19 recession ended in April 2020, according the National Bureau of Economic Research (NBER). The NBER is the official arbiter of when recessions begin and end. The recession was the shortest but also one of the deepest in US history.
  • It is a big week for earnings reports with 9 companies in the Dow and 76 in the S&P reporting.
  • Dow Jones down 725 at 33,962, US$ up 0.158 at 92.845, and Crude Oil down $5.47 at $66.34.

                                                                                   

    Corn 

    The corn market was stronger in the morning, continuing the strength from the overnight session but ended the day modestly higher, well off the session highs. Pressure from the outside markets caused the corn market to fade lower.

  • Corn conditions came in at 65% in the good/excellent category vs. 66% expected and 65% last week.
  • Forecasts this week show dry conditions for much of the Corn Belt which is welcome for the eastern portion but not the northwest.
  • China reported a record feed grain import number of 25.9 mmt for June. Of that, 15.1 mmt was for corn, a record.
  • The September/December corn spread continues to drop as it now sits at a 3 ¾ cent inverse compared to when it was at a 12 ¼ inverse a week ago.
  • Spreads: U/Z 3 ¾ cent inverse; and Z/H 7 ¼ cent carry; Z/N 12 cent carry.

     

    Oilseeds 

    November soybeans dropped sharply today shortly after 9:00 am CT as trade volume picked up substantially during that time. The market continued to trade lower for the rest of the session, pressured by weaker equity and energy markets. 

  • Soybean conditions were at 60% in the good/excellent category vs. 60% expected and 59% last week.
  • Soybean oil was down around 3% on the day as the crude oil market was down over $5/barrel.
  • CIF bids were a couple cents weaker for July.
  • Spreads: Q/X 55 cent inverse; X/F 3 cent carry; X/H 15 ¾ cent inverse.

     

    Wheat 

    Wheat was the bright spot in the grain markets today as the Minneapolis and Chicago futures were around 6 cents higher and KC wheat finished a penny higher.  

  • The winter wheat harvest pace was at 73% complete vs. 72% expected and 59% last week.
  • The spring wheat conditions were at 11% in the good/excellent category vs. 15% expected and 16% last week. 63% of the crop is rated in the very poor and poor categories.
  • Iran’s state agency the Government Trading Corporation made no purchase in an international tender for 60,000 tonnes of milling wheat.
  • Spreads: Mpls U/Z 12 ¾ cent inverse, Kansas City U/Z 11 carry, Chicago U/Z 8 ¾ cent carry.