Bryant Sanderson

Jun 8, 2021

Highlights

  • US officials said yesterday they seized $2.3 million in bitcoin paid to the hackers of the Colonial Pipeline.
  • US job openings are expected to increase 77,000 to a new record of 8.200 million vs. March’s 597,000 increase to 8.123 million.
  • The US trade deficit for April is expected to narrow from a record -$74.4 billion in March to -$68.7 billion.
  • As of 7:10 AM: Crude oil down 0.56 to 68.67, Dow futures down 20 at 34,596, S&P 500 futures up 6.50 at 4232.00, and the U.S. $ index up 0.114 at 90.060. 

Corn

  • Corn is higher on the overnight as dry and hot conditions are expected for much of the western Corn Belt. Yesterday’s crop progress report showed conditions in the good/excellent category at 72% vs. 74% expected and 76% last week.
  • The July contract was down 3 ½ cents yesterday while the December contract was 11 ¼ cents higher. The Goldman roll and concerning forecasts attributed to the lower July/December spread from a 90 ½ cent inverse to a 75 ½ cent inverse.
  • Urea futures are sharply higher, following the higher new crop corn futures.
  • Open interest was up 6,130 with N down 30,800, U up 22,400 and Z up 8,300.
  • Spreads: N/U 52’2 inverse, N/Z 69’6 inverse, U/Z 17’4 inverse, Z/H 5’6 carry. 

Outlook: Stronger to start but very reactive to any change in the weather forecasts that come out every 6 hours with the next update coming at noon eastern time. 

Oilseeds      

  • Soybeans are higher overnight finding support from hot and dry weather in the forecasts for much of the western Corn Belt.
  • Planting is wrapping up with the latest estimate at 90% but below the 92% expected by the market. Conditions in the good/excellent category were at 67% vs. 70% expected.
  • July futures were down hard yesterday as the Goldman roll began this week and the new crop contract finding support from the hot and dry forecast. The July/November spread went from a $1.45’6 inverse on the open to a $1.19 inverse on the close.  
  • Malaysian palm oil futures were down 80 ringgits overnight to 4049 ringgits as expectations of higher stocks in May and stronger production weighed on futures. Soybean oil futures in the US brushed off the lower palm oil, trading 70 points higher on the July at 71.53.
  • Open interest was down 2,370 with N down 17,500 and X up 9,800.
  • Spreads: N/Q 39’0 inverse, N/X 120’6 inverse Q/X 82’0 inverse, X/F 0’6 carry. 

Outlook: Stronger but volatility will remain due to any changing of weather forecasts. 

Wheat

  • All three wheat classes are higher overnight as well following the corn and soybeans higher.
  • Extreme volatility happened in the Minneapolis market yesterday. The September contract reached a high of $8.45’6 Sunday night but got down to $7.81 at one point, making a 64.75 cent range.
  • Rains are expected over the next few days for North Dakota, causing the sharp drop in yesterday’s market. The rain totals continue to change with each weather forecast update. Spring wheat conditions were at 38% on the good/excellent categories vs. 40% expected and 43% last week.
  • Winter wheat harvest is 2% complete vs. 5% expected. Conditions were at 50% good/excellent vs. 48% expected and 48% last week.
  • Jordan has issued a tender to buy 120,000 tonnes of wheat from optional origins.
  • Japan is looking for 181,355 tonnes of food wheat from US, Canada, and Australia.
  • Mpls N/U 3’6 carry, Kansas City N/U 8’2 carry, Chicago N/U 6’4 carry. 

Outlook: Stronger today, with the winter wheat markets following corns lead but Minneapolis will continue to be reactive to the weather forecasts.