Jim Warren

Jul 23, 2021

Highlights

  • August grain options expire today.
  • First Notice day for deliveries of August futures is next Friday, July 30th.
  • Outside markets as of 7:00 am CT: Dollar up .143 at 92.965, Crude Oil down $.09 at $71.82, Dow futures up 180 at 34889, and Gold down $9.10 at $1796.30.

Corn

  • Yesterday’s Drought Monitor showed little change from last week for the cornbelt as a whole, but Minnesota’s D2-D4 category increased over 19 points to now almost 72% of the state is in that severe of a drought.
  • Brazil imported a record 14.1mmt of fertilizer in the first half of this year, up 14% YOY.  The majority of the fertilizer was Potassium Chloride, and Russia was their largest fertilizer source.
  • BAGE estimated that 72% of Argentina’s corn crop has been harvested and that production will be 48mmt.  USDA is currently estimating 48.5mmt.
  • China only sold 4% of the imported GMO corn it offered at auction last night and none of the non-GMO.
  • The Cattle On Feed report will be released at 2:00pm CT this afternoon.  Current estimates are for 99% On Feed, 94.2% Placed and 102.3% Marketed.  The 6-month Cattle Inventory report will also be released; the average estimate for All Cattle is 99.5% of a year ago. 

Outlook: December corn held support at the 20 day Moving Average in yesterday’s trade and is chopping sideways in light overnight trade.

Oilseeds

  • China’s Dalian soybean futures closed 29 cents lower overnight, while their palm oil futures traded to 2 month highs during the session.  China’s soybean imports are expected to slow the remainder of the year due to feed substitutions.
  • Gulf soybean basis dropped 6 cents on the nearby yesterday, to +65Q. 

Outlook: November soybeans breached their 20 day MA but managed to rebound and close above it yesterday.  Overnight trade was weaker, but prices remain inside yesterday’s trading range.

Wheat

  • Russia reduced their wheat export tax from $35.20 tonne to $31.40 for the period July 28th to August 3rd.
  • Strategie Grains lowered their estimate of France’s soft wheat crop to between 37-37.5mmt due to poorer yields expected in northern areas.  Their estimate was 38mmt last week; last year France produced 29mmt.
  • FranceAgriMer estimated the country’s soft wheat conditions declined a point to 75% Good/Excellent due to quality-affecting rains at harvest, which they estimate is 14% complete.
  • Ukraine’s Ag Ministry estimated their wheat harvest is 30% complete with a current yield of 4.28 t/ha (63.5 bu/acre).  Their grain exports are 49% ahead of last year to start the new marketing year and they expect a 20.7mmt wheat crop.
  • 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 amount of acreage abandonment will be an important factor in Spring Wheat production this year.
  • BAGE estimated Argentina’s wheat crop is 98% planted on an expected 6.5m/ha.  Dryness in the north is worsening the crop conditions there.

 Outlook: KC and Chicago gapped lower in yesterday’s trade, and that will be initial targets for any recovery.  MPLS wheat managed to close higher and last week’s highs will be initial resistance to watch.