Jim Warren

Jul 22, 2021

Highlights

  • Weather forecasts continue to show above normal temperatures for much of the country the next two weeks, but recent model runs have shown a little more precipitation than before.
  • August grain options expire tomorrow, Friday, July 23rd.
  • First Notice day for deliveries of August futures is next Friday, July 30th.
  • Coffee futures have made new contract highs the last two days in a row, driven by recent freezes in Brazil.  The nearby September futures have risen 21% in the last 3 days.
  • Outside markets as of 7:00 am CT: Dollar down .074 at 92.680, Crude Oil up $.52 at $70.82, Dow futures up 50 at 34739, and Gold down $6.80 at $1796.60.

Corn

  • Corn total exports were a negative 40.7tmt vs estimates of 0 to 700tmt in today’s weekly export sales report.  China cancelled 160tmt of old crop and now has 4.426mmt of old crop sales remaining to be shipped, with 6 weeks left in the marketing year.
  • Ethanol stocks increased 1.38 million barrels last week to 22.52 million barrels, the largest weekly increase in over a year.  Gasoline demand was just slightly higher than the previous week.
  • The U.S. Ag Attache in India raised their corn export estimate to 2.8mmt due to India’s lower prices relative to world values. 

Outlook: Improving weather forecasts plus disappointing exports are weighing on the market.

Oilseeds

  • Soybean exports were 238.3tmt vs estimates of 50 to 650tmt, soymeal were 87.4tmt vs estimates of 175 to 500tmt and soyoil were .7tmt vs estimates of -20 to +20tmt.
  • Brazil’s 2021/2022 soybean crop is estimated by market consultancy Patria Agronegocios to increase 6% from this year to 144.7mmt, as the area planted is expected to increase almost 7% to 40.85 million hectares (100.94 million acres).  USDA is currently 144mmt on production.
  • China’s nearby soybean futures closed down 23 cents/bu overnight. 

Outlook: Pressure on prices with better weather forecasts, but very light volume trade.

Wheat

  • Wheat exports were 478.2tmt vs estimates of 350 to 600tmt.
  • Record rainfall in Germany and China has raised concerns over wheat quality from their current harvests.  27% of China’s wheat crop is grown in the affected Henan province.  Also hearing reports of sprouting issues in some U.S. SRW wheat areas.
  • The U.S. Ag Attache in Canada lowered their estimate of wheat yields there to 3.37 tonnes/hectare (50.05 bu/acre); USDA was at 3.48 t/h (51.6 bu/acre).  They also warned they may lower it again once the full effects of recent weather are realized.
  • The Wheat Quality Council’s HRS tour will commence next week.  You can follow our CHS Hedging’s participants at @hedgeit on Twitter at that time.   CHS Hedging on Twitter
  • The CCC issued a tender for 72.8tmt of HRW for donation to Ethiopia for shipment September 25th – October 5th.
  • MPLS wheat has pulled back the last three days, yet open interest continues to rise; it has increased every day since July 8th . 

Outlook: Weather again, MPLS prices have now dropped back within their upward channel.