John Wesley Willson

Jul 30, 2021


Equity markets ended the week slightly lower, as positioning around month end likely contributed to the softer tone Friday. The Ag markets were down hard due to month end as well. The weather maps didn’t look to bring much for relief, leaving the trade wondering why the selloff was so severe.  Despite the concerns surrounding a 4th wave of COVID, energy markets were higher.

  • The CDC has announced that vaccinated individuals can spread the delta variant of COVID-19.
  • Brazil is set to increase soybean acres for the 15th year in a row, estimated at 100.2 million acres. This is a 4% increase over last year.
  • Bayer announced that they will be removing glyphosate products from lawn and garden stores as early as January of 2023.
  • Outside markets as of 2:43 PM Central: Sep crude oil at $73.87 up $0.25; U.S. Dollar index at 92.1480 up 0.2840; Gold at $1816.80 down $14.40; Dow at 34,915.04 down 169.49 points. 



Corn futures ended the week trading lower, as the resistance levels broken yesterday were unable to hold as support. On a weekly basis, the December contract left a near perfect doji pattern. The indecision within the marketplace is palpable as the two-sided trade continues. On one hand, the questions surrounding the production for this upcoming crop are largely unanswered. We saw what happened in August last year and given the tight balance sheets, the possibility of below trendline yields needs to be respected. On the other hand, concerns surrounding the delta variant are growing and if another lockdown occurred, it would wreak havoc on corn demand. The seasonality of the market is also working against prices as rallies continue to look like selling opportunities for the speculative community. As we stated yesterday, the next two weeks will determine the outcome of this crop and because of that, the market will likely remain rangebound in the short term.

  • Closes: Sep at $5.47’0 down 11’0; Dec at $5.45’2 down 11’2; Mar at $5.53’2 down 11’0.
  • Corn basis continues to weaken as end users are mostly covered until harvest.
  • Spreads: U21/Z21 1’6 inverse, Z21/H22 8’0 carry, Z21/K22 12’4 carry.



Soybean futures fell hard on Friday, after posting strong numbers the previous session. We cannot blame weather as being the driver of the sell-off because the most recent runs did not add moisture or reduce the heat. The most logical explanation is that prices resided towards the top of the new trading range and it was month end. The risk remains as August weather is especially important in determining the yield for soybeans. Soybean oil was down sharply as well, after failing to break the resistance at 65. We expect this choppy sideways trade to remain until the middle of August. By then, we will have a better idea as to whether there will be a significant production issue or not.



  • Closes: Aug at $14.14’6 down 19’4; Sep at $13.55’4 down 29’6; Nov at $13.49’2 down 28’4.
  • Processors remain well covered until harvest and that is weighing on basis levels.
  • China’s lack of recent purchases is beginning to concern the market as the USDA may eventually have to decrease exports if the export program doesn’t pick up the pace soon.
  • Spreads: Q21/X21 61’4 inverse, U21/X21 6’0 inverse, X21/F22 4’6 carry.



Wheat was not immune to the early weakness, but it did recover better than the other grain markets. The wheat complex saw two-sided trade as the market attempted to go positive during Friday’s session. Several deferred months in the Chicago and KC contract managed to close in positive territory. In the long run its unlikely that wheat will stand on its own and will eventually be subjected to the moves in the corn market. There is still quite a bit of technical damage on the wheat charts and further downside should be expected as seasonal weakness is beginning to creep into the marketplace.

  • Sep closes: Chicago at $7.03’6 down 1’4; Kansas City at $6.73’2 down 1’2; Minneapolis at $9.04’6 down 13’6.
  • Russias agriculture consultancy IKAR reduced the size of the upcoming wheat crop by 3mmt, bringing it to 78.5 mmt.
  • Spreads: Chicago U21/Z21 9’2 carry, Kansas City U21/Z21 11’0 carry, Minneapolis U21/Z21 13’6 inverse.