Market Thoughts 10.17.21
Current Clients we will be sending out a separate email with the weekly Market Algo readings.
Corn Complex- Corn continued to trade within its range once it bottomed post WASDE report early in the week. Upcoming year carryouts were expanded to 1.5 bil. bushels, on the high side of market expectations. No major adjustment in yields versus last month. USDA did adjust exports slightly higher, so they expect to see implied Chinese demand to remain strong alongside others in the world needing US corn. This felt a bit counter as recent USDA attaché statements from China indicate slightly lower imports from the US in the upcoming year. Funds for the week dropped some of their length and have started to increase a bit of their short position. Will need to keep an eye on fund action as we continue forward. With wheat balance sheet staying tight this will keep a floor under corn.
Soybean/Canola Complex- WASDE continued the trend from the quarterly stocks report with carryouts for the 21/22 crop year projected at 320 million bushels. This was above the high end of market expectations with year ago stocks carried forward and a near bushel increase in yield. No adjustment was made to exports at this time, but still a high likelihood we see lowered adjustments in upcoming reports. Canola corrected a bit with beans, but still traded back over $900/MT as we ended the week. With both Canadian and US canola stocks at near record lows, the complex will need high prices to make sure demand stays rationed. Funds have continued to grow their short in the soybean complex leading to a near neutral managed money position.
Wheat Complex- Wheat continued to see strong gains with additional cuts in US and world wheat stocks. Carryout levels for US wheat took us back to 07/08 levels. Most world wheat is held in China and India neither of which are large exporters to the world market. Available milling stocks to the world are tight and will continue to that way even with projected decent Australian and Argentine crops. Minnie wheat continued to grind higher post report taking out its highs from the summer. This market will continue to be volatile but current trade action feels strong, with the job of the market to ration demand till next harvest.
Outside Markets- Equity markets ended the week on high note digesting more recent inflation data but coupled with slightly better jobs reports at weeks end. Energy markets still seem poised for another leg higher as we enter winter heating season in many areas of the world with low stocks to carry through. Coal market continues strong with shortages reported throughout China and India.
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.