Ami Heesch

Aug 3, 2021

Highlights

The grain markets were on the defensive from spillover weakness in the energy markets and forecasts for improving rain chances across the US Midwest later this week and/or weekend. Wall Street traded higher on strength in Apple and healthcare stocks, along with an uptick in corporate earnings reports. Concerns of whether increases in virus cases and chatter of renewing mask mandates along with the possibility of re-imposing restrictions going into the fall and winter months helped keep a lid on values.

 

  • The annual Farmfest get-together takes place this week.  Stop by and chat with the CHS Hedging folk at booth number 318.
  • The next StatsCan Principal Field Crop Production report is scheduled for August 30, 2021 (estimates as of July).
  • The energy markets mostly lower with crude oil down 62 cents at $70.64/barrel (low was 69.19 earlier).
  • DJIA up 255 at 35090, S&P up 33 at 4412 (record high).....NASDAQ up 61 at 14742.
  • US$ up 0.016 at 92.065, gold down 8 bucks at 1811 and CD$ down 0.00165 at 0.7977.

     

    Corn

    The corn market traded lower on spillover weakness in the soy complex, despite declining crop conditions last week. Prices drew additional pressure from chances of rain across the US Midwest this week and/or weekend.

  • Closes: September down 8 ¼ cents at $5.50 ½, December down 7 ½ cents at $5.51 ¾, March down 7 cents at $5.60 ¼. Red Dec closed unchanged at $5.05 ¼. Processor bids were unchanged in IL, down 2 in Iowa and up 5 in Nebraska. Ethanol bids were unchanged to 10 weaker.
  • Gulf premiums were mostly unchanged for A/S.
  • Spreads: U/Z 1 ½ carry, Z/H 8 ¼ carry, Z/N 14 carry........N22/Z22 60 ¼ inverse.

     

    Oilseeds

    The soybean market got thumped on improved crop conditions with forecasts of chances of additional moisture later this week or weekend. Prices drew additional pressure from weakness in the crude oil market.

     

  • Closes: November down 33 ¾ cents at $13.19 ¾, January down 33 ¼ cents at $13.25 ¼, March down 29 ½ cents at $13.23 ½. Red Nov closed down 16 ¼ cents at $12.48 ¾.
  • The products were lower with meal down 8-9 bucks and oil down 148 points.
  • Gulf premiums skyrocketed for A/S (up 72 cents for August and up 70 cents for FH Sep). Processor bids were unchanged to 20 cents weaker, with the exception being that of Cedar Rapids which was 5 cents firmer.
  • Canadian 10-Day weather forecast suggests a wetter pattern to develop with ideas that it will be too late to help the canola (rapeseed) crop.
  • The canola market was higher on uncertainty of extent of crop losses form drought like conditions during much of the growing season.  The November closed up 12-13 bucks at 855.10.
  • Spreads:  X/F 5 ½  carry.....X/H 4 ½ carry.......X/N 5 ½ carry.....N22/X22 75 inverse.

     

    Wheat

    The wheat market traded both side with concerns of crop losses in the Black Sea Region, Canadian Prairies, and the US Northern Plains. Prices drew additional pressure from spillover weakness in the corn and soybean markets.

     

  • September closes: Mpls down 3 cents at $9.19 ¾, KC up 4 cents at $7.07 ½, Chicago down 5 cents at $7.24 ½.
  • Deliverable stocks: 15.6 mb in Duluth, down 755k bushels and 49 mb in Mpls which is up 356k bushels.
  • Pakistan tenders for nearly 400k tonnes of optional origin wheat for LH Sep/Oct shipment.
  • Paris milling wheat values were lower on weakness in the US market. The market awaits results of the Algerian tender.
  • Harvest activity continues in MN and ND with the norther and far western parts of ND 1-3 weeks from harvest. Some areas are still green suggesting there was ample moisture to keep the crop growing.
  • The 10-Day weather outlook for the Canadian Prairies looks wetter, although ideas are that it will have come too late in the game for their wheat crop.
  • Spreads: Mpls U/Z 13 inverse.....Kansas City U/Z 11 ¼  carry....Chicago U/Z 10 ½ carry.