Afternoon Market Highlights 10.20.21


Ami Heesch

Oct 20, 2021

Highlights

Strong day in the Ag space today with concerns of tight supplies in the oil, meal, and wheat markets. Farmers continue their harvest hustle ahead of more rain events expected later on this week or weekend. Farmers start to think about input costs for next year with reports of rising fertilizer prices.

 

 

  • The energy markets saw both side with December crude oil up 82 cents at $83.26/barrel (high so far is 83.48).
  • US$ taking on a softer tone, down 0.157 at 93.577, the gold market up 16-17 bucks at 1786/ounce and the CD$ up 0.00280 at 0.81185.
  • DJIA up 160 at 35617, S&P up 15-16 at 4527 (strong healthcare earnings like Abbott) and NASDAQ down 7-8 on weakness in the Big Tech Stocks.

Corn

The corn market traded higher on borrowed strength from the wheat market and the soy complex and demand optimism. Cash markets firm on slowed harvest activity in parts of the US Midwest where there have been rain showers. Strong ethanol production data provided underlying support to the corn market. Farmers are said to be looking to store their crop as a hedge against higher input costs for next year’s planting season.

 

  • Closes: December up 9 cents at $5.369 ¼, March up 8 ¾ at $5.47 ¾, July up 8 cents at $5.51 ½, Red Dec up 8 ¾ cents at $5.34 ½.
  • Gulf premiums were unchanged for October and 2 cents weaker for November. Processor bids were unchanged to 10 cents firmer and ethanol bids were steady to down 2 cents.
  • Weekly ethanol production came in at 1, 096,000 barrels per day, an increase of 64k barrels per day. Stocks popped just above 20.0 million barrels.
  • Average trade estimates for tomorrow’s export sales report: 700 tmt-1.42 mmt.
  • Brazil corn production for 2021/22 is estimated at 117.8 mmt (107.2-128.9). First crop estimated at 28.4 mmt and second crop estimated at 87.5 mmt. Increased production said to come from an increased in the area planted.
  • Spreads: Z/H 8 ¾ carry.

Oilseeds

The soybean market traded higher on slow farmer selling and borrowed strength from the soymeal and soyoil markets. Prices drew additional support from record palm oil prices. December soyoil climbed to levels not seen since the end of July.   

  • Closes: November up 17 ½ cents at $12.45 ½, January up 18 at $12.55, July up 18 ¼ at $12.78 ¾, Red November up 18 at $12.48 ¾.
  • The products were stronger with meal up 5-6 bucks at 328.40/ton and oil up 231 points at 64.70.
  • Gulf premiums were 4 cents weaker for October and 1-3 cents weaker for November. Processor bids were mixed (unchanged to +5 cent /-15 cents).
  • Average trade estimates for tomorrow’s weekly export report: 1.5-2.52 mmt for beans, 150-410 tmt for meal and 4-35 tmt for oil.
  • The canola market was stronger on slow selling on the part of the farmer and rallies in related markets (EU rapeseed). The November closed up 11-12 bucks at $949.30 (new contract highs in November through May 2022).
  • Spreads: X/F 9 ½ carry.

Wheat

The wheat market climbs sharply higher on concerns of tight supplies of good quality protein wheat. Prices drew additional support from the rallies in the soy complex and corn. Mpls Dec climbed to levels not seen since July of 2012.

 

  • December closes: Mpls up 15 ½ cents at $9.89 ¾, KC up 11 ½ cents at $7.59 ¾, Chicago up 13 ¼ cents at $7.49 ¼.
  • New contract highs in Mpls Dec 21 through Dec 22, KC July and Sep made new contract highs, Chicago July and Sep got close to making new contract highs.
  • Weekly export sales estimates: 250-670 tmt.
  • Jordan bought half of their 120k tonne wheat tender.
  • Planting delays seen in China from bouts of rain since September. Plantings were reported at 26% complete through October 19, down 27% from where they have been over the past several years at this time.
  • EU wheat prices soared to new contract highs on spillover strength in the US wheat market.
Spreads: Mpls Z/H 14 inverse, Kansas City Z/H 6 ¼ carry, Chicago Z/H 11 ¾ carry. Mpls Dec sits at a 228 & 238 premium to KC and Chicago respectively.