Bryant Sanderson

Sep 22, 2021

Highlights

Equity markets were higher as the macroeconomic fear of the debt default in China by a large real estate developer waned as it appears China can handle the situation. Federal Reserve held benchmark interest rates near zero. They did indicate rate hikes could be coming sooner than later and they will start pulling back on the stimulus they’ve been providing but no timetable was given. The Fed also released their economic outlook saying they expect a decrease in economic growth and higher inflation to come still. 

  • China Evergrande Group said an interest payment on one of its yuan-denominated bonds has been resolved through negotiations off the clearing house. The Chinese government is likely to step in, splitting up its businesses to avoid any widespread harm to its economy.  
  • The UK government is subsidizing US fertilizer manufacturer CF Industries to restart one of its UK plants to ensure there is CO2 supply for their food and drink industry. CF Industries had shutdown its plant due to the high cost of natural gas that made it unprofitable to operate.
  • Energy markets were higher with crude oil up 1.47 at 71.96/barrel.
  • US$ up 0.170 at 93.370. The gold market is down 9.0 bucks at 1767.0, CD$ up 0.0030 at 0.78350.
  • DJIA up 338.67 at 34,258, S&P up 41.50 at 4,395, NASDAQ up 150.45 at 14,896. 

     

    Corn

    The corn market was higher as buying came back to the market after two days of lower risk-off trade. Heavy rain amounts in the eastern Corn Belt have delayed harvest there, but western Corn Belt is seeing ideal harvest weather.   

  • Closes: December up 8 ½ at $5.25 ½, March up 8 at $5.33, July up 7 at $5.36 ½. Red Dec up 4 at $5.01.
  • Ethanol production was 926,000 bpd, down from 937,000 bpd last week. Stocks were up to 20.1 million barrels vs. 20.0 million last week.
  • CIF bids were stronger for September were up by a few cents while October and November were up by two cents.
  • There was some confusion in the market today regarding the blending mandates by the EPA. One news source claimed they obtained a document showing a reduction in the mandated volumes for 2020 and 2021. However, another news source in an email exchange with the Renewable Fuel Association (RFA) explained the revised volume obligations were sent to reporters to make it look like it came from the RFA but did not.
  • Export sales tomorrow are expected to be between 300,000-800,000 tonnes.   
  • Spreads: Z/H 7 ½ carry, Z/N 11 carry, N2/Z2 35 ½ inverse.

     

    Oilseeds

    The soybean market higher was higher finding support from a stronger global edible oil market and risk-on trade. Malaysian palm oil futures were up 3% overnight leading US soybean oil futures to trade nearly 2% higher. Like corn, soybean harvest continues to roll along in the western Corn Belt while the far eastern Corn Belt is experiencing wet weather, delaying their harvest.   

  • Closes: November up 8 ¾ at $12.82 ¾, January up 9 at $12.91 ¾, March 8 at $12.95 ¼. Red Nov up 3 cents at $12.52. The products were mixed with meal mixed and oil up 107 points.
  • Malaysian palm oil futures were higher again overnight, up 3%, finding support from the Malaysian Palm Oil Association estimating production during September 1-20 down 0.55% from the same timeframe in August.
  • Soybean export sales are expected to be between 500,000-1,100,000 tonnes tomorrow.
  • Spreads: X/F 9 carry, X/H 12 ¼ carry, X/N 20 ¾ carry, F/H 3 ½ inverse, N2/X2 51 ¾ inverse. 

     

    Wheat

    The wheat market  was back higher today, finding strength from the risk-on trade across the equity and commodity markets.   

  • December closes: Mpls 15 ¾ at $9.03 ½, KC up 15 ½ at $7.06, Chicago up 15 ½ at $7.05 ¾.
  • Export sales tomorrow are estimated to be between 250,000-600,000 tonnes.
  • Philippines is tendering for an estimated 224,000 tonnes of feed wheat.  
  • Pakistan tenders to buy 640,000 tonnes with the deadline for submission September 29. Shipment is sought between January and February 2022. This past Monday, there were prices submitted to the Trading Corporation of Pakistan for up to 500,000 tonnes but no purchase has been reported.
  • Spreads: Mpls Z/H 12 ¼ inverse (dipped to 10 ¾ during the session)......Kansas City Z/H 8 ¾ carry.....Chicago Z/H 10 ¼ carry.