Afternoon Market Highlights 10.22.21


Ami Heesch

Oct 22, 2021

Highlights

The wheat market ran away with the spoon today, with Mpls and KC both climbing to new contract highs in the December. The corn market rose with the wheat market and the soybeans were on the defensive from weakness in palm oil, favorable SA weather and continued reports of good yields in the US bean crop. Processors struggle to source beans. US stocks were softer on talk of a reduction in asset purchases. S&P and the NASDAQ were softer on weakness in tech stocks such as Snap Inc and Intel Corp, Facebook and Twitter. 

  • The energy markets are mostly firmer with Dec crude oil up 1.31 at 83.81.
  • US$ on the defensive, down 0.114 at 93.655, the gold market is 12-13 bucks firmer at 1794/ounce and the CD$ is a freckle higher a t 0.80825.
  • DJIA up 74 at 35677, S&P down 5 at 4535, NASDAQ down 131 at 15084.
  • The Cold Storage report out after the closed showed frozen bellies at 13.032 million pounds and frozen beef stocks at 435.342 million as of September 30th.
  • Cattle on Feed for October: On Feed October 1 at 99.0% (99.4), September placements at 97.0% (101.4) and September marketings at 97.0% (97.5).

Corn

The corn market traded higher, drawing its strength from the rally I the wheat market. Prices drew underlying support from concerns of fewer corn acres planted next year because input costs have been zooming to the moon. 

  • Closes: December up 5 ¾ cents at $5.38, March up 5 ¼ cents at %5.46 ¾, July up 5 cents at $5.51, Red December up 3 cents at $5.33.
  • Gulf premiums were 4  cents weaker for October and 2 cents firmer for November. Processor bids were unchanged to 2 cents weaker. Ethanol bids were mixed (unchanged to down 5/up 8).
  • The French corn harvest nears 32% complete. Ukraine has harvested around 11.0 mmt of their corn crop.
  • Spreads: Z/H 8 ¾ carry, H/K 3 ¾  carry, Z2/H3 6 ½ carry.

Oilseeds

The soybean market was on the defensive from spillover weakness in palm oil with losses limited from strong demand for related oil markets. Reports of better-than-expected yields in the US and South America’s soybean planting season getting off to a good start weighed on the soybean market.   

  • Closes: November down 3 ½ cents at $12.20 ½, January down 2 ¾ cents at $12.30 ¾, July down 4 ¼ cents at $12.54 ½, Red November down 6 cents at $12.23 ¾.
  • Gulf premiums were 1 cent firmer for October and 2 cents firmer for November. Processor bids were mostly unchanged.
  • The products were mixed with meal up 3-4 bucks and oil down 49 points. Chines soybean prices tickled 10-year highs on decent demand, and solid crush margins.
  • Spreads: X/F 10 carry (consider rolling short November hedges at current levels), X/H 19 carry, X/N 33 ¼ carry, N2/X2 31 ¼ inverse.

Wheat

We rung the bell on $10 spring wheat with heightened concerns of good quality protein wheat supplies. Big receipt cancellation in HRW and planting delays in SRW country, provided additional support to the wheat markets. 

  • December closes: Mpls up 27 ¾  cents at $10.13, KC up 26 ¼ cents at $7.74, Chicago up 14 ¾
  • Mpls Dec 21 hit a high of $10.18, KC Dec hit a high of $7.75 and Chicago July, Sep, and Dec 22 all tickled new contract highs.
  • Paris mill wheat climbed to new contract highs in sympathy with the US wheat market and world demand (Tunisia bought 100k tonnes of soft wheat).
  • Argentina wheat benefits form recent rain events. Temperatures are expected to be high over the next few days.
  • Australia’s wheat said to be in high demand as shipping slots get filled up.
  • French wheat plantings were last reported at 40% complete. Kazakhstan’s wheat crop estimated at 11.8 mmt with harvest nearly complete.
  • Russia’s wheat export tax goes from $61/tonne this week to $67/tonnes next week.
  • Spreads: Mpls Z/H 24 ½ inverse (got to 25 cents before the close), Kansas City Z/H narrowed to 2 ½ carry (got into ¾ carry), Chicago Z/H 11 ¾  carry. Mpls Dec sits at a 238 ¾-cent premium to the KC Dec (high was 258 ¼ back in July) and a 256 ½-cent premium to the Chicago Dec.