Bryant Sanderson

Jun 10, 2021

 Highlights

  • The consumer price index was up 5.0% for May vs. 4.7% expected. April’s 4.2% on an annual basis was the fastest rise since 2008. The core consumer price index, which excludes food and energy, was up 3.8% vs. 3.5% expected, the fastest annual rise in 28 years.  
  • US jobless claims were 376,000, down 9,000. Expectations were for claims to be 370,000.
  • JBS said they paid $11 million in bitcoin to the hacking group that encrypted their files. The company said they had most of their systems operational before paying but felt they needed to pay to ensure their files are safe.
  • The reservoir created by the Hoover Dam has dropped to its lowest level ever, indicating just how dry it is in western US.
  • UN’s Food and Agriculture Organization (FAO) says rising food import costs threaten the worlds poor countries.
  • As of 7:25 AM: Crude oil up 0.15 to 70.11, Dow futures up 69 at 34,506, S&P 500 futures up 2.00 at 4220.50, and the U.S. $ index up 0.054 at 90.175. 

Corn

  • Corn is modestly higher overnight after yesterday’s turn around back up. Corn basis pushes were made yesterday at ethanol plants, supporting futures.
  • WASDE report out today at 11am CT isn’t expected to show much change from the May Report. Old crop stocks expected to be 1.207 billion bushels vs. 1.257 billion in May. New crop stocks are expected to come in at 1.423 billion bushels vs. 1.507 in May.  
  • Export sales for old crop were at 189.6 tmt vs. expectations of 100-500 tmt and 26.4 mt for new crop vs. expectations of 200-600 tmt.
  • Open interest was up 7,430 with N down 37,100, U up 30,200 and Z up 5,000.
  • Spreads: N/U 60’6 inverse, N/Z 85’2 inverse, U/Z 23’4 inverse, Z/H 6’0 carry. 

Outlook: Higher, supported by dry and hot forecasts and better cash prices with activity likely to be light leading up to the WASDE report today. 

Oilseeds      

  • Soybeans are higher overnight, recovering some of yesterday’s losses as weather forecasts still show hot and dry conditions over the next 10 days for much of the western Corn Belt.  
  • USDA’s WASDE report today is expected to show little change from May with old crop stocks at 122 million bushels vs. 120 million in May. New crop stocks are expected to be 146 million vs. 140 million in May.
  • Export sales for old crop were 15.7 tmt vs. expectations of -100-200 tmt and new crop was 105 tmt vs. expectations of 100-400 tmt. Soymeal export sales for old crop were 136.3 tmt vs. expectations of 100-300 tmt and 3.9 tmt for new crop vs. 0-50 tmt expected. Soyoil sales were 3.2 tmt vs. -10-16 tmt expected.
  • Malaysian palm oil futures were down again, this time 27 ringgits to 3844 ringgits, a 7-week low as weak June exports to date is pressuring the market.
  • Open interest was down 6,750 with N down 21,700 and X up 11,300.
  • Spreads: N/Q 38’4 inverse, N/X 113’2 inverse Q/X 74’4 inverse, X/F 1’0 carry. 

Outlook: Higher leading up to the WASDE report today. 

Wheat

  • Mixed markets as the winter wheat classes are both down led by the Chicago market. Minneapolis is slightly higher on light trade. Matif wheat was 1.25 euro/tonne lower to 211.25 euro/tonne overnight.
  • Export sales were 325.9 tmt vs. 200-450 tmt expected.
  • WASDE report today is expected to show old crop stocks at 869 million bushels vs. 872 million in May. New crop stocks are expected to be 783 million bushels vs. 774 million in May. Hard red winter production is expected to be 760 million bushels vs. 731 million in May.
  • Tunisia is believed to have bought 50 tmt of soft milling wheat and Japan bought 181 tmt of food wheat from a combination of the US, Canada, and Australia.
  • Strategie Grains raised their EU soft wheat estimate to 131.1 mmt from 129.6 mmt in May.
  • Mpls N/U 5’6 carry, Kansas City N/U 7’6 carry, Chicago N/U 7’0 carry. 

Outlook: Mixed, with winter wheat markets struggling to find some upside this morning.