Market Thoughts 02.08.21
WASDE Report this Tuesday the 8th at 11:00 am CT, pre report estimates at end of report.
Current Clients we will be sending out a separate email with the weekly Market Algo readings.
Corn Complex- A range bound week in the corn complex as market was expecting another round of flash Chinese sales that didn’t show up during the week. Export sales for the week were record large as expected with Chinese flash sales from the week prior included. As mentioned in prior commentary we still need to keep an eye on actual shipment pace, thru last week’s report we have been around average normal pace for corn loadings. We will need to average just north of 47 mil bushel a week from here on out to ship currently booked sales. Spec and index fund positions declined week on week. Brazilian safrinha plantings are running behind pace of normal as wetter conditions and later bean plantings affect farmers ability to get crop in the ground. Will need to continue to monitor pace of these plantings as this crop lateness could affect yield if it drags too close to the dry and early freeze season.
Soybean/Canola Complex- Beans and canola had a quiet week as well with only small gains for the week for new crop beans and canola. StatsCan was out on Friday with canola stocks at 12.1 MMT, an 8-year low; this was expected given current world oilseed protein demand. Spec funds positioning was flat week on week. Brazilian crop harvest has been affected by untimely moisture slowing harvest slowing the early flow of soybeans to ports for export. Looking as though late Feb to full month March will be the major portion of harvest volume. Of note basis premiums at ports in Brazil have continued to push lower from their highs in late 2020 of +90 to nearby premiums trading toward +30 to +35. Cash market there still is expecting an extremely large harvest.
Wheat Complex- Wheat complex hung out for the ride this week with sideways to lower trade across the complexes. The market for the moment continues to monitor changes in the Russian export tax and quota stories. KC wheat production areas still struggling with drought in parts of NW KS, NE CO and western NE, but areas of OK, TX and Central and Southern KS are not in drought with newest updates. If trend continues these higher production areas may offset some of the drier region production issues. Export sales for wheat continue to slightly outpace USDA projections with spring wheat around 7% of USDA sales pace. Funds are maintaining a neutral position.
Outside Markets- US equities complex rallied throughout the week with all three major indexes rallying to near or all time highs. Dollar index broke out from its early year lows back towards the 91-point level. Will need to monitor this trend as strong dollar could be impactful on our export business later in the year.
2/9/21 WASDE Report Estimates
Most Current Soil Moisture Index Drought Indicator and North American Drought Monitor Below
This material should be construed as market commentary, observing economic, political and/or market conditions, and not intended to refer to any trading strategy, promotional element, or quality of service.Information contained herein was obtained from sources believed to be reliable but is not guaranteed as to its accuracy.These materials represent the opinions and viewpoints of the author