MARKET SUMMARY 9-16-2021
The last soybean crush for the marketing year exceeds expectations as soybean meal exports were strong. The NOPA released the August crush reports, and soybeans crushed last month total of 158.843 million bushels. This was the largest crush total since the May report, and well above the expectations of 154.183 million bushels. The strength in the numbers comes from the strong amount of soybean meal exports for the month, totaling 857,000 mt, the best month of exports for the protein feed since March, and the best August export total on record. With a strong crush for meal, the oil product saw a build-up of supplies, with soybean oil stocks at 1.668 billion pounds, well above expectations of 1.555 billion. This stockpile was at an 8-year high. In price action on Thursday, soyoil prices tumbled, while good buying support was seen in the soybean meal markets. Overall a friendly crush report, and with the quarterly grain stocks report coming up at the end of the month, the strong crush number may help to tighten already tight old crop supplies.
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CORN HIGHLIGHTS: Corn futures closed weaker today with losses of 3-1/4 to 4 cents as Dec led today’s drop closing at 5.29-1/2. Today’s high price in Dec was 5.37-1/2. It appeared to be just a slow day all around with other markets, like soybeans and wheat, finishing near steady. Export sales were a disappointment at 9.7 mb. Year-to-date sales are 967 mb, 20% ahead for this same time period last year. Providing underlying support is a continued expectation that loading facilities in the Gulf will reach a more normal schedule in the weeks ahead. Continued talk that early harvest results suggesting lower than expected is viewed as supportive as well. There may also be a growing belief that this year’s weather, particularly in the western half of the Corn Belt, could have an impact on test weights and final yield results. For some, if not many, this year might closely be reminiscent of 2019 where test weight was light and yield variable. Sales to China have been mostly non-existent since spring. Record corn production and a Chinese hog market falling apart. due to high feed costs and liquidation. is a growing concern that U.S. exports will not reach forecasted levels.
SOYBEAN HIGHLIGHTS: Soybean futures finished with small gains of near 1 cent on most futures contracts. Near-by Nov closed at 12.96 up 1-1/2 cents and Jan at 13.04-3/4, up 1-1/4. Bears argue that futures finished well off their high today (12 cents) and soybean oil losing near 150 points is not a recipe for a bull trend. Bullish traders will argue that futures are experiencing a typical pull back into the harvest season and it’s just a matter of time before price moves to a higher level. Export sales at 46.5 million bushels were termed supportive. Yet the year-to-date sales figure at 809 bb is still behind last year’s 1.184 billion bushels. A year ago, at this same time, soybean futures were just beginning their rally in an ascent that lasted close to a year. The recent pullback is a combination of end-users not stepping up to the plate and the expectation for increasing yield when timely rains helped much of the crop from mid-August to early September. We’re not sure we agree that overall yield increased much. Yet, we do believe that the recent pullback is mostly from a lack of strong end-user buying either from the commercial side or exports. In other words, back to our theory that end users are buying hand to mouth due to higher prices waiting for harvest to make larger purchases. There is also little reason for emotional or panic buying by end-users as the near-term weather outlook is conducive for harvest.
WHEAT HIGHLIGHTS: After a strong couple of days, wheat had a pretty quiet day. Dec gained only 3/4 cent closing at 7.13 & Mar up another 1/4 cent closing at 7.24. KC Dec contracts traded a little stronger than Chi today posting a 4-1/2 cent gain, closing at 7.20-1/2 & Mar gaining 4-3/4 cents closing at 7.29-1/4. The morning started with Paris milling futures also taking a break, but ended posting gains at the close. News out of the EU is that roughly 40% of the wheat could make milling quality this year after rains and flooding during harvest. Wheat exports were very strong today, coming in at 617,100 mt, which is a good sign that maybe U.S. wheat has finally become competitive among Russian prices continuing to soar. Speaking of Russia, it is rumored farmers are contemplating planting as much as 1 million hectares less wheat next year due to the export tax and no end in sight of it lowering.
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Author
Bryan Doherty