Bryant Sanderson

Jul 21, 2021

Highlights

 Equity markets were higher again today, gaining back all the losses from Monday’s sharp drop. Energy markets continued to rebound as well with the September WTI trading over $3.00/barrel higher.   

  • Officials in parts of California and Nevada have reinstated mask mandates as Covid cases have risen as the delta variant makes up most new cases.
  • The US and Germany have agreed to a deal allowing Germany to complete the $11 billion Nord Stream 2 pipeline that will pump Russian gas directly to Germany. The agreement between the US and Germany includes the plan to invest more than 200 million euros in energy security in Ukraine and sustainable energy across Europe.
  • Dow Jones up 286 at 34,798, US$ down 0.211 at 92.765, and Crude Oil up $3.02 at $70.22.

                                                                                   

    Corn 

    The corn market finished modestly higher while the September contract finished unchanged. The price action was back and forth as the September and December contracts failed to fill their respective price gaps on the charts from July 2nd.

  • The September/December spread continues to be volatile as it finished the day at a 3 ¼ cent inverse with a low at a 2 ¾ cent inverse after finishing up at a 6 cent inverse yesterday.
  • Weekly ethanol production was down 13,000 BPD to 1.03 million BPD. Ethanol stocks were up 1.38 million barrels to 22.52 million barrels.
  • Spreads: U/Z 3 ¼ cent inverse; and Z/H 7 cent carry; Z/N 10 ¼ cent carry.

     

    Oilseeds 

    Soybeans finished mixed with the nearby August and September contracts weaker while the rest of the curve was slightly higher. Soybean oil was down around 2%, pressuring soybeans. Soybean meal had a strong day, finishing more than $4/ton higher. 

  • Weather conditions are sill mostly dry with above normal temperatures in the short term with some long-term forecasts showing a better chance of rain for the Corn Belt, but it is too far away to have much confidence in them.
  • Patria Agronegocios out of Brazil released their 2021/22 Brazilian soybean production estimate at 144.7 mmt, up 6% from the prior year while the USDA forecast is 144 mmt.
  • Spreads: Q/X 50 cent inverse; X/F 3 ¼ cent carry; X/H 14 ½ cent inverse.

     

    Wheat 

    Wheat finished mixed with Minneapolis down while the winter wheat markets were higher. China continues to be rumored to have bought some US winter wheat. There also appeared to be some spread liquidation with the Minneapolis getting sold.      

  • Conditions across the spring wheat areas in the US continue to be very poor even though there have been spotty rains this week in North Dakota. The annual spring wheat tour begins next week.
  • The September Minneapolis/Kansas City spread dropped 25 ¾ cents today to $2.30 in favor of Minneapolis. The spread reached a high yesterday of $2.835.
  • Spreads: Mpls U/Z 10 ½ cent inverse, Kansas City U/Z 11 carry, Chicago U/Z 8 ¾ cent carry.