Market Thoughts 08.08.21
Current Clients we will be sending out a separate email with the weekly Market Algo readings.
Corn Complex- Yet another week of range bound trade for the corn complex as the market approaches the Aug WASDE this upcoming Thursday. We have seen decent new export sales the last couple of weeks, but little major Chinese business at this time. Old crop exports have slowed with cancellations and rolling of business from old crop to new crop. Although supply is a concern of the market, the US crop expectations range from the 176-180bpa, in most likely scenarios from here on out meaning carryout remains comfortably above 1 billion bushels. Market focus will continue to be on demand and how the South American crop is starting out. We are just 30-60 days away from early corn plantings in Brazil.
Soybean/Canola Complex- Soys also remained range bound even after several announced export sales for the week. Canola did find support after filling the gap late last week and traded back towards $900/MT. Soybean export sales have been lackluster to finish the year. We have seen okay new crop sales but we are now approaching similar export pace to 16/17 and 18/19 and behind year ago pace. It would appear the Brazilian crop to this point has kept a lid on US exports but prices there have started to match or exceed US offerings for new crop so you will likely see more business now headed the US’s way. First crop Brazilian beans will be going in the ground by mid-September so the market’s focus will begin turning to crop conditions there. Canola market is still in the process of determining crop size with the trade looking to the Canadian crop as it starts coming off the field in the next couple of weeks. Will these newer canola genetics be able to weather the heat and dryness better than older genetics time will tell.
Wheat Complex- All classes of wheat moved higher on the week as the market digested tighter Russian crop sizes alongside declining crop quality in parts of the EU crop. The WASDE this upcoming week will be of interest as USDA adjusts supply and demand projections in the world balance sheet for wheat. With declines expected in Canadian and Russian crops will that be enough to propel a market higher or just confirm what the market has already traded. KC and Chi wheat have priced themselves back out of the feed channels and although not competitive in the world export market have gained support in the US domestic market. KC complex is being looked at a potential substitution for a portion of the smaller Minnie crop.
Outside Markets- Same story different week with equities continue to edge or reach all time highs. End of week did see positive jobs report with lower unemployment and higher wages noted. We did some sell off in bonds in response and move higher in the dollar with anticipation strong labor markets could lead the Fed to raise interest rates sooner than expected.
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.