TFM Daily Market Summary 8-10-2021


U.S. soybeans have moved back to the lead in the price war for the soybean export market. One of the biggest concerns weighing on soybean prices has been the quiet demand tone over the past handful of weeks, due to the inability of the U.S. soybean to compete against the fresh Brazilian supplies. As the U.S. market was working lower off early summer highs, the export market and mainly the Chinese were securing their supplies of the newly harvested Brazilian soybeans. As those supplies are starting to tighten, the U.S. pulled more price competitive in the month of September for export business. Currently, U.S. soybeans are trading around 30 cents/bushel cheaper than the Brazilian counterparts. Typically, U.S. soybeans will be the best value from September into early 2022. The export market has responded as the USDA has announced export sales the past four days to China and unknown destinations, locking in the soon to be harvested new crop supplies. This positive demand news will provide some overall support underneath the soybean market in the weeks going forward.


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CORN HIGHLIGHTS: Corn futures closed quietly with September losing a penny to close at 5.49-1/4 and December down 0-1/2 to 5.53-1/4. USDA Crop Ratings improved 2 percentage points to 64% Good-to-Excellent. The new 10–14-day weather forecasts are showing additional rains to the northern Midwest to alleviate some dryness. Corn dented is 8% vs 10% a year ago. Corn dough stage is at 56% vs 38% last week, and 56% a year ago. Corn silking is 95% vs 91% last week, and 96% a year ago. The USDA WASDE report will be released on Thursday. The market is likely to chop around until the report is released. Analysts are expecting the USDA to lower U.S. corn yield from their July estimate. An export announcement of 182,880 mt for delivery to Mexico helped provide support this morning. Next week could be on the drier and warmer side for most of the Midwest increasing the need for rain in the extended forecast. Some key drought monitor map areas will be smaller on Thursday next scheduled release. We’re not sure the USDA will make significant changes to yield on this month’s report. what you may hear more of in the days ahead is the potential for harvested acres to decline. Therefore, one potential is that yield remains mostly unchanged but harvested acres declines by as much as a million. Nonetheless, It is a time of year where typically prices have trouble sustaining increases. What is different about this year is the tight projected supply of corn into the harvest season as well as a tight supply already forecasted for the year ahead. Lastly, Conab, the Brazilian reporting agency for agriculture indicated a drop in the overall corn crop from 93.4 mt to 86.7. Last year was 102.6 mmt.

SOYBEAN HIGHLIGHTS: Soybean futures firmed with August again leading the way higher, gaining 13-3/4 cents and closing at 14.47-3/4. September added 6-3/4 cents to close at 13.48-1/4 and November 7-0 to finish the session at 13.36-3/4. Weekly Crop Ratings were left unchanged at 60% Good-to-Excellent versus 74% a year ago, but the Poor-to-Very Poor category increased by 1 point. The trade was expecting little to no change. Soybeans blooming came in at 91% vs 86% last week, and 91% a year ago. Slow weekly export shipments and weekly export sales look problematic for the market if they continue. We are in a seasonal window where export sales typically accelerate, but early sales to China may be holding off in what is typically our strongest sales period of the year. Soybean export sales of 132,000 mt for delivery to China and 130,000 mt to unknown helped to provide support for prices today, yet while supportive these numbers are relatively small compared to overall expectations. The 6-to-10-day day outlook continues to suggest the western regions of the corn belt remain below normal in precipitation and above normal in temperature. Beyond this time, it does look like there’s increased chances for rain, but one has to wonder if this may be too late for some of the crop.

WHEAT HIGHLIGHTS: Sept Chi up 15 3/4 cents at 7.27 and Dec up 14 1/4 cents at 7.39 1/2. Sept KC wheat up 12 3/4 cents at 7.14 1/4 and Dec up 12 1/2 cents, closing at 7.26. The continued talk of falling productions in several countries around the world took over the wheat market today. Paris milling wheat futures soared to new contract highs today, fueled higher by falling production numbers in Canada & Russia, and quality and yield concerns in the EU from all the rains this season. All eyes will be on the USDA report Thursday to see how much (if any) the USDA will trim Russian production from their current 85 mmt. It’s also expected that USDA will cut spring wheat stock numbers and all wheat stocks. World ending stocks are still expected to be at a record large scale but a drop of 3-4 mmt are still expected. Recap from yesterday’s USDA’s crop condition reported winter wheat harvest virtually completely at 95%, spring wheat harvest off to a nice pace fueled by drier weather, at 38% (well ahead the 5-year average of 21%). Spring wheat condition rated at 11% good to excellent (1% better than last week) and 61% poor to very poor (only 3% change from last week). Unfortunately, it appears as many feared, whatever rains hit the key spring wheat areas last week were hardly enough to actually change the condition of the standing crop.

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John Heinberg

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