• jcrist18

Market Thoughts 08.01.21

Current Clients we will be sending out a separate email with the weekly Market Algo readings.

Corn Complex- Corn chopped sideways this week with the market continuing to be cautious with belt wide heat but the prospect of moisture for the core of the corn belt in many short- and medium-term forecasts. Portions of NE and IA picked up timely rains over the weekend with a cooler week in store for much of the corn belt. As we have continued to make note export inspections still have failed to make USDA pace with projections of 80-100 million bushels of 20/21 corn moving to the 21/22 balance sheets. This is also indicative in the Sep/Dec spread which was inverted by as much as 30 cents during May/June and traded back to even by the end of this past week. The market is telling us it is not concerned about old crop tightness anymore and makes a tough narrative for extreme bullishness with this new crop for the time being.

Soybean/Canola Complex- Price action was contrary to the narrative of tight balance sheets and crop issues in Canada as both beans and canola closed lower on the week. We did see Nov canola covers its first big gap from the most recent move so likely find some support at these levels as the market waits for early canola results from the US and Canada. Beans much like corn traded sideways for the week with trade monitoring Aug moisture trends and temperatures in extended forecasts. Much like corn, soybeans look to add back to their balance sheets with poor demand to finish up the old crop season. Funds seem less concerned with the bean balance sheet as they have liquidated more of their length this past week.

Wheat Complex­- Spring wheat tour was out this week confirming what the trade had already traded with lower yields expected for North Dakota with tour average at 28.9. Minnie did gain on the week but did fail to take out any significant highs from weeks prior. We continue to see early harvest starting in many areas and cranking up by the middle to end of this week. Early yields have been mostly better than expected, although expectations in many instances were already quite low. Funds in the Minnie complex continue to liquidate their bullish bets on the crop. One note we continue to see is elevated basis levels seasonally for spring wheat as the end users want to gain coverage sooner not later. On the international front we did see a major readjustment in Russian acres by their government statistics group Friday taking over 1MM/ha off the balance sheet which likely drives down total Russia crop several MMT lower for the year.

Outside Markets-Equity markets continue to flirt with record highs supported by a strong week of earnings reports from many companies. We have continued to see reports of slowing consumer spending. One area to watch is the expiration of rental eviction moratorium that ended as of July 31st. There is fear many renters spent their government stimulus dollars rather than saving or paying rent and could force a mini-homelessness crisis as landlords force eviction against non-paying tenants. Could this further stifle consumer demand and upcoming economic expectations? We also have seen slowing in new housing starts and home sales as high prices have curtailed consumer demand.

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.

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