Jim Warren

Jul 20, 2021

Highlights

  • Both Crude Oil and Dow Jones nearby futures held just above their 100 day moving averages in yesterday’s sell-off, a risk-off day driven by OPEC’s production increase decision, and concern of an economic slowdown due to the resurgence of Covid-19 cases.
  • The interest rate on 10 year Treasury Notes dropped to 1.19% yesterday, down 12 basis points and the lowest level since February.
  • Weather forecasts continue to show above normal temperatures and below normal precipitation for much of the country the next two weeks.
  • August grain options expire this Friday, July 23rd.
  • Outside markets as of 7:00 am CT: Dollar up .047 at 92.938, Crude Oil up $.24 at $66.66, Dow futures up 235 at 34074, and Gold up $9.80 at $1819.00.

Corn

  • Corn was rated 65% Good/Excellent in yesterday’s Crop Condition report, unchanged from last week and below the average guess of 66%.  56% of the crop is silking vs the 5 year average of 52%.
  • Illinois corn was rated 65% G/E, recovering the 5 points it lost in the previous week. 
  • There were 1.0mmt of corn inspected for export last week, 459.6tmt of which was to China.
  • Another frost event was reported to have occurred in southern Brazil.  Agrural estimated 30% of the Safrinha corn crop has been harvested in the center south region. 

Outlook: Stabilizing outside markets have allowed corn to react to bullish weather forecasts, with prices near Sunday night’s highs. 

Oilseeds

  • Soybeans were rated 60% G/E, up 1 from last week and in line with expectations. 
  • Nearby contracts in the soybean complex, soybeans, soymeal and soyoil, formed key reversals lower in yesterday’s trade.
  • China imported 10.48mmt of soybeans from Brazil in June, just below the record high of 10.51mmt a year ago and 14% higher than in May.  They only imported 54.8tmt from the U.S. last month.
  • Argentina’s senate passed a measure that would reduce soyoil-based biodiesel use from 10% to 5%, possibly down to 3%, in domestic diesel fuel use.  The legislation is expected to be signed into law by month end. 

Outlook: The soybean complex bounced higher overnight, but so far are just trading inside yesterday’s price range.

Wheat

  • Spring Wheat is rated 11% G/E, down 5 from last week; and 63% Poor/Very Poor, which was up 8 points from last week.  Washington state has zero Spring wheat rated in the Good or Excellent categories.  Percent Harvested of Spring Wheat is expected to be reported next week.
  • The Winter Wheat harvest is 73% complete, up 14 points from last week and 1 below average.
  • Kazakhstan reportedly plans to limit feed wheat exports and ban rye exports for 6 months, beginning August 15th, due to drought conditions there. 

Outlook: KC and Chicago wheat made 2 month highs in the overnight session, while MPLS approached contract highs again, reacting to the decline in Spring wheat conditions.