Morning Highlights 10.19.21


Kevin Stockard

Oct 19, 2021

Highlights                           

  • China’s coal futures hit $300/MT before falling 6% in the last 10 minutes of trading to close just 0.5% higher on rumors of voluntary price cuts. Coal is up over 100% since the beginning of September and at $300/MT was the equivalent of $77/barrel.
  • WTI crude oil is up $1.00+ to a new seven year high $83.50/barrel.
  • China’s offshore yuan rose 0.7% to close under 6.4 per U.S. dollar, a 4-month high and its second largest daily move this year.
  • November options expire this Friday, 10/22/21. First notice day for November futures is Oct 29.
  • As of 7:00 am CT, crude oil is up 0.81 at $82.50/barrel, gold is up 15.1 at $1,780.8, DOW up 170 at 35,303, U.S. dollar index is down 372, and Euro is up 455 pts.

Corn

 

  • Crop Progress showed corn is 52% harvested vs 54% estimate and 41% average.
  • AgRural says Brazil’s first crop corn is 45% planted vs 44% last year.
  • Weekly corn export inspections totaled 976,200 MT vs 650-850k MT estimates, but were still below the 1.3 MMT level needed to reach the USDA’s projection.

 

Outlook:  Dec corn down 2 ¾ to up 1 ½ overnight..  Dec corn is just below its 50 day moving average of 5.35 ¼, continuing to draw support from strong demand.

 

 

Oilseeds

 

  • Crop Progress showed soybeans are 60% harvested vs 62% estimate and 55% average.
  • December board crush is up 0.023 to a new contract high $1.623/bu.
  • Overnight, China’s Dalian No 2 soybeans were up 22 ½, soymeal down 4.50, and soyoil up 81.
  • AgRural says Brazil’s soybean planting is 22% complete vs 8% last year and second fastest on record.
  • Weekly soybean export inspections totaled 2,298,300 MT vs 1.6-2.1 MMT estimates, highest since January and cut the USDA pace deficit nearly in half.

Outlook:  Nov beans down 5 ¼ to up 7 ½ overnight.. beans are quietly working on a fourth consecutive higher close, along with corn and wheat, but have not broken out of their downward trend. There is a long way to go, but South American crops are off to a better start as late planting was a big contributor to their problems in 2020/21.

 

Wheat

 

  • Reuters reports that Ukraine’s grain harvest is 73% complete at 52 MMT, with yields at 4.48 MT/hectare. Total harvest is projected at 80.3 MMT vs 65 MMT last year.
  • Russian wheat exports are down 13% so far this marketing year to 13.6 MMT.
  • Crop Progress showed winter wheat is 70% planted vs 73% estimate and 71% average.
  • Weekly wheat export inspections were 139,800 MT, well below 300-550k MT estimates.

 

Outlook:  Dec KC wheat down 2 ½ to up 8 ¼ overnight.. world wheat prices continue to rise on tightening supplies, with Matif up 1.50 but trading within yesterday’s range. The sharp drop in the U.S. dollar is also supportive.