Editor’s notice: Farm Futures writers Jacqueline Holland and Ben Potter are on task on the Farm Progress Show this week. Cease in on the Prairie Farmer Hospitality Constructing to listen to their every day market outlook day by day at 10 am CDT! Advance Trading Inc.‘s Drew Moore and Cat Sullivan will probably be offering every day market updates of their absence. Take pleasure in their commentary!
HIGHLIGHTS: Revenue-taking contributed to some early weak spot once more immediately and unfavorable developments continued as fear over US Gulf export services might not be again on-line in a well timed style. At this level it’s unsure when the southern portion of Louisiana could have energy restored in houses or for enterprise to be restored.
Some market pundits are more and more involved (and rightly so) that China’s U.S. corn shopping for in 2021-22 could come up quick, failing to match this previous yr’s complete of practically 850-million-bushels. China has been absent as a purchaser since mid-Could and has even cancelled roughly 26 mbu of 2020-21 purchases in latest weeks. Present unshipped gross sales heading into the 2021-22 crop yr are on order within the quantity of 480 mbu, nicely wanting what they seemingly took from the U.S. in 2020-21. Moreover, there seem like a number of headwinds. As an illustration, knowledge limitations notwithstanding, 21-22 PRC manufacturing is presently estimated to be up 7.3 MMT, outpacing a projected 5 MMT enhance in corn use. Add to that, the Black Sea manufacturing (Russia and Ukraine) is projected 11 MMT larger this yr with 90+% of that enhance headed for the export market; and lastly, we wouldn’t be shocked if not less than a 3rd of that finally ends up going to China, if no more. Does all of this add as much as a 2.2-billion-bushel U.S. export yr, and never 2.4 bbu? Keep tuned. To make issues (costs) worse, there have been rumors circulating this morning that China is cancelling Ukraine corn purchases. That’s one option to drive the market down . . .
Demand erosion issues speed up knocking corn down additional immediately.
CZ: -11 ½ @ 5.55 ¼; CH: -11 @ 5.31 ¾
June ethanol manufacturing totaled 30.7 million barrels with every day output of 102.27 Ok, up 1.6% from Could.
The European Union imported a year-to-date excessive of 490 thousand metric tons of corn, which brings the 2021-22 complete to 2.4 million metric tons however stays 6% behind final yr’s tempo.
China has up to now taken about 30% (600 Ok MT) of the two.1 MMT of barley exported by the European Union. Argentine corn gross sales to the export market already complete 35.5 MMT, in keeping with the BCR (Rosario Grain Trade) and could be very close to the report excessive of the 2018/19 crop when 37.2 million MT have been exported. Taiwan is claimed to have purchased 65 Ok MT of Argentine corn for cargo in November.
C&F Costs to Japan (CEPEA’s Tuesday Brazil Inside corn value was off $2.67 larger @ $305.17/MT, versus $255.75 FOB under)
The lack of some fall U.S. export demand to South America and timing in contrast with harvest led to decrease futures costs immediately within the soybean advanced.
SX: -14 ¾ @ 12.77 ¾ ; SF: -13.25 @ 12.87; SMV: -$2.30 @ 340.8; SMZ: -$2.10 @ 343.5; BOV: -$.0078 @ 58.11; BOZ: -$.0081 @ 57.94
EIA biodiesel/renewable diesel manufacturing in June was 95 million gallons, 22 million lower than final month. Soybean oil use in biofuels manufacturing dropped 125 million from the Could complete to 683 million kilos.
The demand for September and October soybean shipments proceed to concentrate on Brazilian outdated crop as US export capability from the Gulf was critically dampened by the storm. Market speak has two October Gulf cargoes switched to Brazil.
European Union Soybean imports fall 65% week to week to 90 Ok MT with the year-to-date complete down 22% at 2 MMT. Soybean Meal imports are down much more this yr, off 28% at 2.2 MMT.
C&F Costs to China— Notice: “Brzl Quality” displays approx. $.25/bu Brazil high quality benefit versus U.S.
Weak point in row crop futures proceed to weigh on the wheat market.
WZ: -8 @ 7.14 ¼ ; WH: -9 ¾ @ 7.27 ¼ ; KWZ, -8 @ 7.04; KWH: -8 @ 7.13 ½; MWZ, -4 ¾ @ 8.98 ¾ ; MWH, -5 ¼ @ 8.76
SoveEcon lowered its Russia wheat crop estimate 800 Ok to 75.4 million, however that is nonetheless above the USDA’s 72.5 forecast. European Union wheat exports by means of Aug. 30 totaled 328 Ok MT. The prior week’s complete, nonetheless. was revised and added 400 Ok MT which introduced the year-to-date complete since July 1, 2021 to three.7 MMT, or a 12% enhance over final yr.
FOB/CIF Wheat Costs to Egypt
IWDS Supply Calculations (Sep CIF soybeans are versus SU)
EIA Petroleum Shares Report
Crude oil inventories declined final week. Crude oil shares fell 7.17 million barrels following a lower of two.98 million barrels the week earlier than. Shares of 425.4 million barrels are up 0.6% from 2 years in the past. Home oil manufacturing elevated 0.84 million barrels per day final week. Imports elevated 0.18 million barrels per day from the week earlier than whereas exports elevated 0.23 million barrels per day. Refinery utilization decreased 0.199 million barrels per day. Gasoline shares elevated 1.29 million barrels per day following a lower of two.24 million barrels the week earlier than. At 227.2 million barrels, gasoline provides are down 1% from the comparable week in 2019.
Distillate provides decreased 1.732 million barrels final week and have misplaced 3.78 million barrels over the past 4 weeks. Distillate provides of 136.7 million barrels are 2.4% above the identical time 2 years in the past. Implied gasoline demand elevated 0.06% from the week earlier than and common demand over the past 4 weeks is down 2.7% from the identical time in 2019.
Ethanol manufacturing eased 28 thousand barrels per day final week following a decline of 40 thousand barrels per day from the week earlier than. Manufacturing of 905 thousand barrels per day is down 1.8% from a yr earlier. Manufacturing on the Gulf Coast elevated 2 thousand barrels per day to common 25 thousand barrels per day. Rocky Mountain manufacturing elevated 1 thousand barrels per day to common 9 thousand barrels per day. East Coast area manufacturing was unchanged from final week at 12 thousand barrels per day. Manufacturing on the West Coast decreased 1 thousand barrels per day to common 7 thousand barrels per day. Manufacturing within the Midwest decreased 30 thousand barrels per day to common 851 thousand barrels per day.
Within the final 36 hours, late-season rains fell on a number of the driest areas of Iowa, Illinois, and Nebraska. Extra rain is anticipated within the western half of corn and soybeans tonight and into tomorrow as one other system strikes by means of the realm. Not a lot of this can carry eastward as it’ll meet dry air later this week. Temperatures within the 60s-70s and minimums within the 40s-50s are forecasted for subsequent week within the Corn Belt. A couple of showers could also be seen within the north and east. Milder climate and a few rain will almost certainly comply with the cool interval subsequent week.
Costs as of 1:55 PM CDT
Cat Sullivan is a danger advisor at Advance Trading Inc. The danger of buying and selling futures and choices will be substantial. All data, publications, and materials used and distributed by Advance Buying and selling Inc. shall be construed as a solicitation. ATI doesn’t keep an impartial analysis division as outlined in CFTC Regulation 1.71. Info obtained from third-party sources is believed to be dependable, however its accuracy is just not assured by Advance Buying and selling Inc. Previous efficiency is just not essentially indicative of future outcomes.
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