Ami Heesch

Aug 2, 2021

Highlights

New month and thoughts of  new money moving in the commodities (wheat) at the beginning of a new month.  Manufacturing data showed growth below trade expectations. There were hints today that the US central bank could start to wane should the next couple of jobs reports indicate a rise in employment to 800—k to 1.0 million jobs. US Senate completed their 2,702-page draft on infrastructure today.

  • Private analysts estimates for corn and bean yields/production expected to be released later this week.
  • Energy markets were mostly weaker on increased Delta variant cases detected around the globe. Crude oil traded 2.46 lower at $71.49/barrel.
  • USDA monthly S&D report scheduled for August 12 at 11 AM CDT.
  • US$ down 0.099 at 92.047, gold down 50 cents to a buck at 1813/ounce and the CD$ down 0.00185 at 0.79945.
  • DJIA down 97 at 34838, S&P down 6-7 at 43.83, NASDAQ up 8-9 at 14681.

     

    Corn

    The corn market traded higher, drawing strength from the rally in the wheat market. Brazil’s second corn crop estimated at 51.6 mmt, nearly 19% below last year on adverse weather conditions throughout the planting and growing season.

  • Closes: September up 11 ¾ cents at $5.58 ¾, December up 14 at $5.59 ¼ and March up 14 at $5.67 ¼. Red Dec up 10 ¼ at $5.05 ¼.
  • CIF premiums were mostly unchanged for Aug/Sep.
  • Weekly export inspections were reported at 1.4 mmt, above trade estimates ranging from 900 tmt to 1.2 mmt.
  • Crop conditions are estimated at 63% G/E (62-65), down 1% from last week. USDA rated the corn crop at 62% G/E versus 64% G/E previously.
  • Corn silking reported at 91% with 38% of the crop in the dough stage.
  • Forecasts suggest a bit of beneficial moisture to arrive later this week, along with moderating temperatures.
  • Spreads: U/Z 1 carry......Z/H 8 carry.....Z/N 12 ¾ carry......N22/Z22 66 ½ inverse.

     

    Oilseeds

    The soybean market traded firmer on borrowed strength in the wheat market, despite favorable weather forecasts for later in the week. The products were mixed with meal up 5-6 bucks and soyoil down 68 points.

     

  • Closes: November up 4 ¼ at $13.53 ½, January 4 ¼ at $13.58 ½ and March up 5 ¼ at $13.53. Red Nov up 11 ¼ at $12.65.
  • CIF premiums were 3 cents weaker for this and next week and unchanged for LH Aug and Sep.
  • Weekly export inspections were reported at 181 tmt, in line with trade estimates ranging from 100-300 tmt.
  • Crop conditions are estimated at 57% G/E (54-60), down 1% from last week. USDA rated the soybean crop at 60% G/E, up from 58% G/E previously.
  • Soybeans setting pods at 58% versus 42% last week and 52% on average.
  • June soybean crush reported at 162.0 million bushels on par with trade estimates but down from May at 172.0 mb.
  • Spreads: X/F 4 ¾ carry......X/N 4 inverse.....N22/X22 84 ¾ inverse.

     

    Wheat

    The wheat market traded higher on technicals, money inflow in KC and Chicago, along with crop reductions in the Black Sea Region and crop worries in Canada. The annual spring wheat tour estimated this year’s crop at 29.1 bushels per acre. As the harvest gets underway, many reports are coming in around 30-60 bushels per acre with decent test weight and protein. Quality and color looks good so far. KC and Chicago gained on Mpls with the Mpls Sep at a 219 premium to KC Sep and a 191 ½ premium to Chicago Sep.

     

  • September closes: Mpls up 18 cents at $9.22 ¾.....KC up 30 ¼ cents at $7.03 ½.....Chicago up 25 ¾ cents at $7.29 ½.
  • Weekly export inspections were reported at 388 tmt (116 HRS.......114 HRW......78 SRW.....80 SWW). Trade estimates ranged from 325-515 tmt.
  • Egypt purchased 60k tonnes of Romanian wheat for LH Sep / FH Oct shipment at $293.74/tonne. This compares to $279/tonne in July.
  • Spring wheat crop conditions estimated at 8% G/E (7-10) down 1% from last week. Harvest is estimated at 11% complete (6-17). USDA rated the spring wheat crop at 10% G/E up from 9% G/E previously. Harvest progress was reported at 17% complete, up from 3% last week.
  • Winter wheat harvest is estimated at 91% complete (89-94) versus 84% complete last week. USDA reported harvest at 91% complete versus 84% last week and 86% on average.
  • USDA estimated “Other Spring Wheat” planted acres at 11.580 million and harvested acres at 11.215 million with a yield of 30.7 bushels per acre and production at 344,575 mb. Harvested acres will be key this year.
  • USDA pegged Hard Red Spring wheat production at 303 million bushels on approximately 10.7 million planted acres....... and 9.9 million harvested acres. With this scenario and a 29-bushel yield.....this year’s Hard Red Spring Wheat production could come in near 287 million bushels, down 16 mb from the USDA July report estimate.
  • Spreads: Mpls U/Z 11 ½ inverse.......Kansas City U/Z 11 ¼ carry......Chicago U/Z 10 carry.