Market Thoughts 06.2821
Current Clients we will be sending out a separate email with the weekly Market Algo readings.
Corn Complex- Corn remained overall range bound to lower on the week as moisture moved or projected to move thru various dry regions over the weekend. As I type many areas of IA, MN and SD that had struggled to catch rains did so since market close on Friday. Even many of you across the state of ND also caught showers or rains Friday into Saturday. Although a weather market, the big move lower Friday was due to the Supreme Court ruling that overruled lower court rulings regarding small refinery exemptions (SRE’s) and their enforcement. Questioning of this portion of the RFS as well as the overall RFS enforcement starts to bring some bigger questions into play as how blending obligations may be viewed in the future. We will need monitor the continued rulings and enforcement from Washington as this could be a big millstone to corn usage going forward.
Soybean/Canola Complex- Soys followed similar path as corn with a weaker finish to the week mostly on concern about renewable mandates. Canola was stronger on the week with drier forecasts for many of the Canadian provinces, but did slip at week end with some forecasts showing relief in areas. We did see multiple confirmations of the rumored Chinese new crop soybean sales. US new crop sales are around average pace though. The biggest question on the trades mind is will we see an increase in new crop bean acres on the upcoming acreage report on the 30th. US domestic balance sheets remain tight. But we can’t lose sight of the fact the Brazilians plan to increase their 21/22 crop acres by roughly 5.4 million acres (roughly the size of Indiana’s bean acres), with that crop competing with the US in less than 12 months.
Wheat Complex- Spring wheat the big winner in the complexes this week as market continues to acknowledge that much of the damage has been done to spring cereal crops in ND and spring wheat in particular. KC and Chi wheat continue to lose against Minnie as both the soft red and hard red crop sizes look quite good. World wheat production continues to maintain high production potential across the EU and Black Sea regions. There are some lingering concerns about Russian spring wheat areas, but it is a smaller percentage of their overall crop and they appear to have large export ready stocks close to their Black Sea ports.
Outside Markets- Equities and dollar index have traded below most recent highs, but still hanging at the upper end of their current ranges.
Projected Balance Sheets for Corn/Soy/Wheat with Avg/High/Low Trade Guesses as well as a guess from LHC and compared to Prospective Plantings. Usage numbers are current USDA guesses.
Corn Projections- We likely grow carryout beyond 20/21 projections, but to what extent will be determined by both final acres and yield.
Soybean Projections- Like corn, will likely see some growth in US balance sheets with a near trend crop acres and yield.
Wheat Projections- Even though spring wheat might pull the average down, the winter wheats look to carry the load on the balance sheets.
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.