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Afternoon Market Recap for September 15, 2021

phongphan5922/Thinkstock markets charts - green with red line
Market rallies on further news of NOLA reopening.

Good afternoon! China and unknown cancelled a combined 328,000 metric ton soybean export sales. Markets took an early dip and rallied with further reports of New Orleans ports reopening and vessels loading. It is nice to see lots of green again!

Corn

Futures traded in a 14-cent range reaching highs for the day during the “clean-up” session. There is continued talk of disappointing yields as harvest continues.

CZ: + 11 ¼ ; CH: + 11                              

Summer corn planting in Brazil’s centre-south region reached 16% of the estimated area as rains delayed works over the week, local consultancy Agrural reported yesterday. The weekly increase of 6 points left the region behind the 20% figure reached at the same point in 2020. Brazil had 65 mbu of corn in its export line-up, down 14 from the prior week and nearly 100 million LESS than LY. Shipments in the 2nd week of September were 725 K MT, down 40% from LY’s 1.2 MMT estimated total.

BAGE expects Argentina to produce a 55 MMT corn crop this spring, versus 50.5 this year and 2 MMT more than the latest USDA forecast. Some suggest this could lead to exports as much as 42 MMT (1.650 bbu) and 2+ million than their prior record of 39.4 MMT.

Spreads:

091521PMCornSpreads.PNG

EIA Petroleum Stocks Report

Crude oil inventories declined last week. Crude oil stocks fell 6.42 million barrels following a decrease of 1.53 million barrels the week before. Stocks of 417.4 million barrels are up 0.1% from 2 years ago. Domestic oil production decreased 1.10 million barrels per day last week. Imports declined 0.05 million barrels per day from the week before while exports increased 0.28 million barrels per day. Refinery utilization increased 0.036 million barrels per day. Gasoline stocks decreased 1.9 million barrels per day following a decrease of 7.22 million barrels the week before. At 218.1 million barrels, gasoline supplies are down 5% from the comparable week in 2019. Distillate supplies decreased 1.689 million barrels last week and have lost 6.56 million barrels over the last four weeks. Distillate supplies of 131.9 million barrels are 3.5% below the same time 2 years ago. Implied gasoline demand slowed 7.45% from the week before and average demand over the last four weeks is down 1.2% from the same time in 2019.

Ethanol production firmed 14 thousand barrels per day last week following an increase of 18 thousand barrels per day from the week before. Production of 937 thousand barrels per day is up 1.2% from a year earlier. Production in the Midwest increased 11 thousand barrels per day to average 881 thousand barrels per day. Gulf Coast production increased 1 thousand barrels per day to average 23 thousand barrels per day. Rocky Mountain region production increased 1 thousand barrels per day to average 11 thousand barrels per day. Production on the East Coast was unchanged from last week at 12 thousand barrels per day. Production on the West Coast was unchanged from last week at 9 thousand barrels per day.                                                                                                                        

091521Ethanol.png

Soybeans

Beans traded in a 20-cent range today. After the large cancellation, beans dipped but gained momentum due to corn strength.

SX: + 12 ; SF: + 11 ¾ ; SMV: -$2.10; SMZ: -$2.20; BOV: +$.0157; BOZ: +$.00150

China is said to have bought 8 Brazilian soybean cargoes for October along with 2 U.S. PNW on Monday and then another 10 Brazilian cargoes for October and November. Agricensus reported China is only 74% covered for October and needs 5 MMT more for November.

Brazil’s SB export line-up eased 4 to 107 mbu, 21 smaller than last year. Meal dropped 25 K to 915 K MT for a sizable 25%/300 K decline versus a year ago. Soybean exports, however, were 1.2 MMT last week against approximately 820 K in the year ago period.

The BAGE puts the 21-22 Argentine soybean crop at 44 MMT, vs 43.1 for this year. Area planted is expected to fall 2.4% to 16.5 million hectares.

Analysts expect the export of Ukrainian soybeans in 2021/22 to increase by 15-20%, reaching between 1.7 and 2.1 million MT on an increase in production and a recovery in demand from major importers, including the European Union. Output is expected to rise 19% to between 3.65 and 32.7 MMT.

Spreads:

091521Soybeanspreads.PNG

NOPA August Crush

National Oilseed Processors Association (NOPA) released their August report today. It was supportive beans in that it implies a slightly larger annual crush than the USDA is forecasting. It was negative for meal as 73% of total meal use comes from the domestic component and this marks the 3rd consecutive month consumption has been 7% or so below last year. For oil, the production-disappearance-stocks numbers were slightly supportive, but today’s higher prices are likely more related to the energy sector with crude up $2+.

091521AugustCrush.png

Wheat

Row crop strength and foreign markets gave wheat a nice lift today, nearly reaching a 20-cent range.

WZ: + 11 ½ ; WH: +12 ½ ; KWZ, +14 ¼ ; KWH, +14; MWZ, +17 ½ ; MWH, +17 ¼

Wheat exports from Canada fell 65% in the week to September 5 versus the previous week, with 143,200 MT leaving ports. Total loadings of wheat during the first five weeks of the 2021/22 marketing year have reached 1.54 million MT, down by 6% from the same period of last year,

The BA Grain Exchange raised its forecast for the Argentine wheat crop by 200 K MT, up to 19.2 MMT.

Spreads:

091521WheatSpreads.PNG

Weather

Some scattered thunderstorms will drop small amounts of rain through Friday, but most will remain dry. Continue to watch for higher temperatures this weekend that won’t lift until next week’s system brings a cooler front.

Prices as of 1:59pm

091521Prices.png

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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