TFM Daily Market Summary 8-13-21


Global wheat prices maintain their strength and are leading the other grain markets higher.  While much of the focus on the USDA reports yesterday were focused on corn and soybean production, the wheat market may have stolen the show.  Tuesday, prices pushed through contract highs as growing concerns have been building regarding global wheat supplies.  This week has seen cuts in the Russian wheat crop, production, and quality concerns in the European crop, talk of Argentina wheat supplies being tighter due to frost and dry conditions, and nor forgetting the issues in the U.S. and Canada with drought conditions.   On the report Thursday, wheat ending stocks came in well below expectations as the USDA lowered the Canadian crop by 7.5 mmt and the Russian crop was reduced by 12.5 mmt.  The world ending stocks were lowered to 279.06 mmt, 9mmt below expectations.  The strength in wheat prices may be getting to a top, but the quick change in global supplies has brought the buyers forward as competition has begun for that tighter global supply.

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CORN HIGHLIGHTS: Tosay, corn futures had a stronger open fueled from yesterday’s friendly USDA report, but as the day progressed, futures retreated with September corn only up 1 1/4, finishing at 5.68 1/4, and December futures down 1/4 cent, closing at 5.73. Although today may have been a bit lackluster, for the week, September futures gained 13 cents, and December futures gained 16 cent – staying above key support levels, which is friendly fire ahead of harvest. Yesterday’s yield number came in at 174.6 bpa vs last month’s 179.5 – this new number was based on farmer surveys, but next month we will get the objective boots on the ground number. The USDA has Illinois at a record yield of 214bpa. Despite record yields in some areas like this, it appears that the USDA does not feel it is enough to offset the areas that have faced drought conditions. DTN’s virtual crop tour wrapped up today with a final US yield projection of 176.5. Regardless if you believe USDA or DTN – the thoughts of raising a record corn crop just seem out of the grasp of reality at this point.  China’s corn futures remain at high prices (around 10.25 per bushel). The weather forecast for the next 5-10 days remains dry overall, though there could be some showers in the western corn belt. Stochastics for December corn are showing a loss of momentum today, which is in line with the pullback off of today’s highs.

SOYBEAN HIGHLIGHTS: Today was the last trading day for August futures, which garnished a 22 3/4 cent gain for the day, closing at 14.24 1/4 – over 50 cent premium to the September contract, which could be viewed positively if you’re of the mindset that the front month contract will meet where the previous expired. September futures didn’t disappoint today either, up 26 cents at 13.73, with new crop November up 24 cents at 13.65, both fueled by yesterday’s USDA bullish report. Yesterday’s yield projection came in at 50 bpa vs 50.8 last month – as with corn, this was based on farmer surveys and the objective yield number will be released next month. The DTN crop tour released their projection for US soybean yields at 51.5, unlike for corn still keeping the prospect of record soybeans alive. Today there were announcements of soybean export sales of 126,000 metric tons to China, and 326,000 to unknown. New crop soybeans have had six consecutive export sale announcements. November soybean stochastics show strong upward momentum, but are near the middle of the range and offer no new signals today.

 WHEAT HIGHLIGHTS: Sept Chi up 8 3/4 cents, closing at 7.62 14 & Dec up 9 1/2 cents, closing 7.74 1/4.  Sept KC wheat up 3 1/2 cents at 7.42 1/4 & Dec up 4 1/4 cents, closing at 7.55. Chicago and KC wheat put in contract highs today, for Chicago the high was 7.74 3/4. Wheat still receiving a bullish push from yesterday’s USDA Supply & Demand report.  To restate, the USDA lowered ending stocks from 665 to 627 mb – the lowest in 8 years.  The USDA also reduced the estimate of world ending stocks from 291.68 to 279.06.  Due to drought in key areas here in the US, as it is well known, the supply has been tightened all across the US Plains and US/Canadian border. The real bullish surprise for wheat was in the ending stocks of HRS – which is 116 mb for the 2021-22 marketing year, lowest estimate in 14 years.

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Amberlee Bratcher

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