John Wesley Willson

Jul 26, 2021

Highlights

Equity markets were up slightly to begin the week after setting new highs last Friday. Traders are paying close attention to a slew of tech earnings that will be announced later this week. Ag markets traded both sides in what was a very volatile session driven by competing weather forecasts. Energy markets continue to keep a close eye on the growing concern surrounding a fourth wave of COVID.

  • The housing market is showing signs of cooling down as sales of new single-family homes declined month over month and inventory of new homes for sale increased.
  • Bitcoin surged as much as 12% at one point on Monday, putting it back above $39,000 for the first time since early June.
  • Argentina has declared a state of water emergency due to the shallow depth of the Parana River, impacting the movement of grains from key export hubs.
  • Outside markets as of 2:27 PM Central: Sep crude oil at $72.13 up $0.06; U.S. Dollar index at 92.6350 down 0.2770; Gold at $1797.00 down $4.80; Dow at 35,132.65 up 71.10 points. 

 

Corn

Corn futures remained under pressure early on in today’s session as the selloff from last week and Sunday night continued. The December contract ultimately found support at the 100-day moving average. Combined with some drier map runs at noon, this gave futures enough of a reason to rally into the close, finishing in positive territory. Key resistance stands in at the $5.52 level as the 20-day moving average resides there, as well as old support.

 

  • Closes: Sep at $5.49’6 up 2’4; Dec at $5.46’6 up 3’6; Mar at $5.54’4 up 3’4.
  • Weekly inspections for corn came out to 1,036,910 MT. This was in the middle of the range of guesses by trade participants.
  • Corn inspections are beginning to trail the pace needed to reach the USDA’s target for the year.
  • Corn conditions declined 1% to 64% good to excellent. The trade was expecting the conditions to remain steady at 65%.
  • Spreads: U21/Z21 3’0 inverse, Z21/H22 7’6 carry, Z21/K22 12’2 carry.

 

Oilseeds

 Soybean futures traded sharply lower on the open Sunday night and the weakness continued before prices stabilized mid-session. When looking at the November contract, the 61.2% retracement level, as well as the 100-Day moving average served as support on today’s break. Similar to what took place in corn, the market reacted to drier maps around noon, as well as the possibility for declining conditions this afternoon. November soybeans will need to climb back above the $13.67 level and work towards breaking additional resistance at the $13.75 level to open back up the potential for $14+ futures. Expect choppy trade as the market remains highly sensitive to ever changing weather runs.

 

  • Closes: Aug at $14.1275 up 11’6; Sep at $13.62’4 up 6’6; Nov at $13.57’6 up 6’0.
  • Weekly inspections for soybeans came out to 241,897 tmt. Inspections for the week were closer to the upper end of the range of analyst expectations.
  • Soybean conditions dropped to 58% good to excellent while the trade was expecting 60%.
  • Spreads: Q21/X21 54’6 inverse, U21/X21 4’4 inverse, X21/F22 5’0 carry.

 

Wheat

The wheat complex was the lone grain market that didn’t manage to turn positive to end Monday’s session. All three wheat contracts were down sharply in the overnights and into Monday, led by the Minneapolis contract. By the close, Chicago took over as the biggest loser, with KC and then Minneapolis falling right behind. There is substantial technical damage that has been done on the wheat charts, including a potential head and shoulders in KC. Prices should receive some support given the declining crop ratings in spring wheat and corn. If and when corn futures sell off into the fall like they tend to do seasonally, wheat could be in trouble.

  • Sep closes: Chicago at $6.77’0 down 7’0; Kansas City at $6.39 down 7’0; Minneapolis at $8.78’6 down 4’6.
  • Weekly inspections for all wheat came out to 477,964 tmt. This fell into the middle of the trade guesses.
  • Spring Wheat crop conditions dropped another 2%, putting the good to excellent at 9%.
  • Spreads: Chicago U21/Z21 9’4 carry, Kansas City U21/Z21 11’4 carry, Minneapolis U21/Z21 11’4 inverse.