Jim Warren

Sep 10, 2021

Highlights

 

The September USDA Crop Production report that was released this morning was the focus of grain trade today, and also affected livestock futures to some extent.  In outside markets, Crude Oil recovered all of yesterday’s losses and the Propane rack price went to new highs of $1.31/gallon, the highest price since February.

 

  • USDA’s Crop Report changes are summarized here:  USDA S&D Sheet
  • News stories circulated about sooner than expected recovery of some terminal operations post Hurricane Ida, but now there is concern about a tropical disturbance near the Yucatan peninsula.
  • Dow Jones futures currently down 120 at 34750, US$ up 0.099 at 92.579, and Crude Oil up $1.63 at $69.77.

 

Corn

 

December Corn broke below $5 just after the crop report was released, but found plenty of buyers there and rallied to end the day with a key reversal higher.  That contract was 6 ½ cents lower for the week.  Traders are now respecting the bullish chart action, but questioning how much upside is possible with harvest on the threshold.  Sunday night trade will be monitored for clues to the answer.

 

  • USDA raised corn yield 1.7 bushels to 176.3 bu/acre, just above estimates.  They also raised both planted & harvested acreage 600K, right inline with estimates.  After all their adjustments new crop carryout was increased 166mbu to 1.408 billion bushels.
  • Sorghum harvested acres were increased 1.425 million to now 6.52 million acres.  Yield was lowered slightly and the combination resulted in production rising 45mbu to 454mbu.
  • NASS will give us our first look at our national corn harvest pace in Monday’s Crop Progress report.
  • Weekly export sales were 905.8tmt and carryover from the last marketing year (Ended 8/31)) was 2.978mmt.

Spreads: Z/H 9 ¼ cent carry, unchanged , and H/K 5 cent carry, up  ½ 

 

Oilseeds

 

November soybeans traded down to their 200 day moving average immediately after the report was released, but like corn, found good buying there and formed a key reversal higher.  Bulls would like to see follow through action next week.

 

  • USDA raised soybean yield .6 bu to 50.6 bu/acre and lowered harvested acres 300K to 86.4 million.  Those changes, along with demand changes resulted in adding 30mbu to carryout, which is now 185mbu.
  • November soybeans were only 5 ½ cents lower on the week.
  • Gulf basis was up 20 cents today, to +70X spot.
  • USDA announced this morning a sale of 132tmt soybeans to China for 2021/2022.
  • Weekly export sales were 1.471mmt and carryover from the last marketing year was 1.805mmt.
  • Spreads: X/F 8 ½ carry, down ¼  and F/H 4 ½ carry, up ¾ .

Wheat

 

MPLS wheat formed a reversal higher today, while KC and Chicago settled slightly lower on the day, but well off their lows.  Even so, for the week the nearby contracts of all 3 classes were down 33 ¾ to 40 ½ cents.

 

  • USDA lowered the wheat carryout by 12mbu to now 615mbu; mostly due to a decline in imports.
  • World wheat carryout was raised 4.16mmt to now 283.22mmt, mostly due to increases in beginning stocks.
  • Weekly export sales were 388.4tmt in this morning’s report. 
  • Spreads: Mpls Z/H 10 cent inverse, Kansas City Z/H 9 cent carry, Chicago Z/H 10 ½ cent carry.