Afternoon Market Recap for September 16, 2021

phongphan5922/Thinkstock markets charts - green with red line
Markets trade mostly lower today with soybeans sliding into the green at the close.

Good afternoon! August economic activity is better than expected, equities fall on fears the Fed may follow through on its plans to scale back its asset purchasing plan.  

Corn

The corn market faded today off yesterday’s gains, trading in nearly a 10-cent range. Export sales were weak and caused some price pressure. Concerns amount for how soon and how much corn China will need.

CZ: -4; CH: -4                                    

Spreads:

091621CornSpreads.PNG

Export Sales were anemic at 9.7 million bushels versus 20-39 mbu expected. Mexico was the leading buyer at 6.1 mbu with Unknown credited with 3.0 mbu. Milo Export Sales were solid at 8.1 mbu. China purchased 4.6 mbu, Mexico bought 1.4 mbu, and “Unknown” is credited with 3.0 mbu in purchases.

In the world market, Argentine producers are said to be aggressive sellers of new crop corn with 250 K MT sold last week, which brings their 2022 crop total to around 6.5 MMT. There also may be indications that China has returned to the U.S. market for milo in recent days. Additionally, according to Anec, Brazil’s September corn exports will likely reach 2.9 MMT, well short of the 6.4 million shipped last September.

C&F Prices to Japan:

091621C&F Prices to Japan.PNG

Dalian Futures: CF: -6 @ $9.67 (1 Yuan = .15550 U.S. $)

Soybeans

Beans traded in a 17-cent range today. U.S. Soybean export demand is questionable. After recent events, how much will be deferred and how much will be lost to our competitors?

SX: + 1 ½; SF: + 1 ¼; SMV: +$4.30; SMZ: +$4.50; BOV: -$.0148; BOZ: -$.0153

China purchased 132,000 MT of soybeans for delivery in the 2021-22 marketing year today. This represents only 40% of what was canceled yesterday. Soybean export sales were strong at 46.5 mbu. The total came in towards the top of the average consensus range of 22-51mbu and nearly doubled the 25 per week needed amount. China purchased 35 mbu and “Unknown” was responsible for 6 mbu.

The remainder of the soybean complex sales were not very impressive. And yet, the unshipped Soybean Meal book (old and new) is record large for this time of year and at 3.4 MMT and is up 22% versus last year. With Board crush near $.90, we should see an active fall meal export program.

Soybean Meal sales at 95.4 K MT were below the 130,000 per week implied rate but near the top end of the estimated 25-100,000 MT range. Sales for 2022-23 crop at 42 K MT fell short of the 50-250 K range. Soybean oil dropped again this week to negative 1.7 K MT after cancellations from Canada of 1.8 K MT. New crop totaled to 6.1 K MT which fell in the upper half of the expected range.

More chatter of China buying additional quantities of Brazilian soybeans surfaced today, with estimates ranging from 6 to more than 10 cargoes sold. Brazil’s exporter group, Anec has upped its forecast of the country’s September soybean exports by 400 K to 4.8 MMT, a 23+% increase over the 2020 total of 3.9 MMT.

Yesterday’s August NOPA crush report suggests the USDA should raise its old crop estimate 4-5 mbu.

Spreads:

091621SoybeanSpreads.PNG

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

091621C&FPricesToChina.PNG

Dalian Futures—SF, +13 @ $25.04; SMF, -$0.40 @ $498; BOF, +$.0095 @ $.6414; POF, +$.0138 @ $.6012

Wheat

The European crop shrinks and milling quality concerns arise giving wheat a slight bump after nearly trading a 12-cent range.

WZ: +3/4; WH: + ½; KWZ, +3 ¾; KWH, +3 ½; MWZ, +1 ¼; MWH, +1

Wheat export sales were very good. At 22.7 mbu sales came in above the expected range of 11-26 mbu expected and 13 per week needed. Nigeria purchased 12.1 mbu which accounted for over half the total sales. HRW, 16.5 TW (8.4 LW); HRS, 2.8 (2.9); SRW 900 K (1.3 mbu); White, 1.7 (1.8); Durum, 730 K (0)

Strategie Grains is estimating the European Union soft wheat crop at 129.1 MMT, a 2.4 million cut from its August estimate. And, as much as 40% of the crop may not reach milling standards, up from 27% a year ago.

Spreads:

091621Wheatspreads.PNG

FOB/CIF Wheat Prices to Egypt

091621FOBCIFWheatPRicestoegypt.PNG

IWDS Delivery Calculations (Sep CIF soybeans are versus SX; Corn, CZ)

091621IDWSDeliveryCalculations.PNG

Weather

Rain in the corn belt is forecasted through the middle of next week are expected to range between 1/10 and ¾” with some amounts of one to two inches, especially in the south. The Northern Plains will be dry into the first part of the weekend with rain amounts of 1/3rd to 1 ½” covering 70% of the region. The Southeast U.S. is forecast to receive one to four inches of rain through Wednesday from eastern Mississippi into central Georgia mainly due to remnant moisture from Tropical Depression Nicholas. ¾ to 3” can be expected for the Delta although southern LA/MS could see 3 ½ to 6”.

9-16-21 PM Prices

Cat Sullivan is a risk advisor at Advance Trading Inc. The risk of trading futures and options can be substantial. All information, publications, and material used and distributed by Advance Trading Inc. shall be construed as a solicitation. ATI does not maintain an independent research department as defined in CFTC Regulation 1.71. Information obtained from third-party sources is believed to be reliable, but its accuracy is not guaranteed by Advance Trading Inc. Past performance is not necessarily indicative of future results.

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