Afternoon Market Recap for August 31, 2021 – Farm Progress

This post was originally published on this site

Editor’s note: Farm Futures writers Jacqueline Holland and Ben Potter are on assignment at the Farm Progress Show this week. Stop in at the Prairie Farmer Hospitality Building to hear their daily market outlook every day at 10 am CDT! Advance Trading Inc.‘s Drew Moore and Cat Sullivan will be providing daily market updates in their absence. Enjoy their commentary!

A closer look at the fundamentals and numbers following yesterday’s crop condition ratings

Concern over potential loss of export business due to Hurricane Ida and the impact it has on Gulf export facilities weighed on the markets today. Yesterday’s crop condition reports played a part in today’s markets as well with the overall conditions remaining unchanged from last week.

Corn

Corn ratings held steady with 60% of the nation’s crops rated good to excellent. This is two points below the numbers from a year ago, five less than what has been reported on average and one point higher than what the trade estimated. 91% of the crop is in the dough stage. This figure is two percent ahead of the average numbers. 59% of this year’s corn crop has dented, which is four percent above the average for this time of year. 9% is called mature, which is only 1 point behind average.

CU: -8 ¼ @ 5.34;  CZ: -7 ½ @ 5.34 ¼   

Spreads:

Spread

CU/CZ

CZ/CH

CZ/CK

CZ/CN

CH/CK

CH/CN

CK/CN

Current

-0.25

-8.75

-13.75

-14.00

-5.00

-5.50

-0.50

Change

+1.75

-0.50

-0.75

-1.50

-0.25

-1.00

-0.75

A well-known consultant to ATI reported his average U.S. corn yield estimate unchanged for the week at 175.5 bushels per acre(bpa). This figure is 9/10’s above the August NASS of 174.6 and is now neutral going forward into harvest. According to Dow Jones, Allendale puts the U.S. corn yield at 176.3 bpa which is even higher than the numbers reported above. A Bloomberg survey has July corn used for ethanol production at 449 million bushels, which is up 25 from a year ago.

Soybeans

Soybean Oil deliveries were numerous today. The possible switching of some export demand to South America also weighed on the markets leaving futures negative across the soybean complex:

SU: -5 @ 12.98 ¾ ; SX: -8 ¾ @ 12.92 ½ ; SMU: -$.04 @ 346.4 ; SMV: -$1.10 @ 343.1; BOU: -$.004 @ 59.36 ; BOV: -$.0081 @ 58.89

Spreads:

Spread

SU/SX

SX/SF

SX/SH

SX/SK

SX/SN

SF/SH

SH/SK

SK/SN

Current

+6.25

-7.75

-12.75

-18.25

-19.50

-5.00

-5.50

-3.50

Change

+4.75

-1.25

-1.75

-2.25

-0.50

-0.50

-0.50

-0.50

Soybean ratings were unchanged at 56% G/E. This was down 10 points versus 2020’s crop, 8 less than average and matched the trade expectations.  93% of the crop has set pods. This is 1% ahead of average. 9% are dropping leaves, 1 below average.

The same Consultant to ATI as reported above places the U.S. soybean yield estimate steady at 50.0 bpa (same as the USDA) and bias moves to “neutral”. Allendale is estimating the U.S. soybean yield at 50.14 bpa.

Reuters puts crush at 165.2 (184.5 last year) and Bloomberg has a range of 165.0-165.7. Reuters’ estimates end of month soybean oil stock at 2,136 billion pounds. This is up from 1.992 at the end of June. Bloomberg’s range is 2,115-2,175 billion pounds.

C&F Prices to China— Note: “Brzl Quality” reflects approx. $.25/bu Brazil quality advantage versus U.S.

Wheat 

Weakness in row crops weighed on wheat today.

WU: -2 @ 7.06 3/4 ; WZ: -1 ¼ @ 7.22 ¼ ; KWU, +1 @ 7.05 ¼ ; KWZ: – ½ @ 7.12 ; MWU, -16 ¼ @ 9.03 ¾ ; MWZ, -6 @ 9.03 ½                                         

Spreads:

Spread

WU/WZ

KW/KZ

MWU/MWZ

Current

-15.50

-6.75

+0.25

Change

-0.75

+1.50

-10.00

Spring wheat harvest progress gained 11 points to 88% complete which is 22 ahead of last year and 17 in front of the average. Australian weather will see some timely rainfall in the southern growing areas over the next two weeks. Argentine wheat in the west is especially need of rainfall as this area has been dry since planting was completed.

FOB/CIF Wheat Prices to Egypt

IWDS Delivery Calculations (Sep CIF soybeans are versus SU)

Weather

Most of the US Corn Belt is forecasted to receive a half inch to two inches of rain through Monday with some amounts of 2 1/2 to 3 1/2 inches likely in the far western areas and from eastern Kentucky through southeastern Ohio. Temperatures are forecasted to be near to slightly below normal in the east and near to above normal in the southwest. The Southeast U.S. is forecast to receive less than 3/4 inch of rain from interior southern Georgia to North Carolina through Sunday while 1/2 to 2 1/2 inches results elsewhere with Alabama and Virginia likely to be wettest. Temperatures are expected to be near normal.  Eastern portions of the US Delta are forecast to get another one to four inches of rain today with a few amounts to five inches as Remnants of Hurricane Ida pass through Mississippi, Tennessee, and western Alabama. The Northern Plains are forecast to receive 3/4 to three inches of rain in Minnesota and the eastern Dakotas through Monday. Temperatures are forecast to be near to slightly above normal.  Argentina is expected to get 3/4 to 2 1/2 inches of rain through Monday in the southeastern areas, with some amounts of as much as 2 3/4 to 3 1/2 inches in Buenos Aires. Rainfall in the northwest is expected to vary from a trace to 1/3 inch. Temperatures are forecast to be near to above normal. Australia is forecast to receive 1/10 to 3/4 inch of rain through Monday in the winter crop areas with some amounts of as much as one to 1 1/2 inches. Rainfall of 1/2 to two inches is also expected in the central areas of Northern Territory. Temperatures are forecast to be above normal today and Wednesday and near to below normal Saturday through Monday.

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