Market Thoughts 07.11.21
Current Clients we will be sending out a separate email with the weekly Market Algo readings.
Corn Complex- Corn backed down from the previous weeks highs as more favorable weather forecasts developed coming off the holiday long weekend. With widespread rains fallen or projected for most of the corn belt through mid-to late July, the market seems to be pricing in yields at or near trend, even with acres of the NW belt in worse shape then most of core I-states. Old crop export shipments continue to lag needed projections to meet USDA export forecasts. Although we did see an early flurry of 21/22 sales, we have not seen much action as of recent. Chinese grain companies have been auctioning off US imports recently and have seen poor participation on these internal tenders. USDA is out with their new WASDE on this Monday the 12th. No major new crop yield adjustments expected.
Soybean/Canola Complex- A bit of divergent path in the bean and canola complexes this week. Soys followed corn lower on the week with continued bearish forecasts for most of the Midwest. Soy export sales were also expecting some new crop Chinese business but that was not seen this week. Old crop market activity has felt slightly firmer on the week with domestic processors looking to cover the balance of their needs into new crop. Export shipment pace also has been below average USDA estimates with chances that they make a downward adjustment on export in the next WASDE coming up on Monday. Market continues to monitor poor Chinese crush margins followed with their lack of market activity in both the US and SA. Oil share led the crush in beans this week. Canola took the higher road with market concerned about continuing dry conditions across the Canadian prairies.
Wheat Complex- Minnie wheat traded range bound to slightly higher to end the week, market continues to weigh crop condition ratings alongside moisture that has moved thru some areas. The next couple of weeks of low precip combined with warmer temps will help determine final outcomes for much of the ND crop. Central and western ND have picked up some nice moisture in the last week to help small grain crops there. KC wheat was lower on the week weighed on by harvest pressure and solid yields across much of KS and into CO and NE as their harvest continues north. Soft red winter wheat also appears to have a near record breaking crop with solid yields and quality coming off the eastern US fields. World wheat market continues to see cheaper values in all the major markets continuing to price US wheat out of the equation to many major importers. With wheat approaching corn values in many ports, it would appear we will see some substitution of feed wheat for corn in feed diets across the world.
Outside Markets- Equities continue to work towards new all-time highs. Dollar index also has held on to recent long terms gains. Oil market did hit some resistance early in the week with shale oil hedging and some disagreement on supply quotas coming out of the OPEC+ meetings late last week. We did see good gasoline and implied ethanol use demand coming out of the holiday weekend. Spot ethanol crush has continued to hold on decently especially for plants sending product out to the West Coast.
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.