Weekly Market Update 6/17/2021
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Here is your weekly market update from the Garden City Co-op Grain Origination Team.
Trivia
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Where did wheat originally come from?
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How many pounds of pasta will one bushel of wheat make?
Answers at the bottom.
Market News
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Wheat harvest in southwest Kansas has begun this week. Some early reports of test cuts seeing fairly decent test weight in spite of some drought conditions in crucial growing times.
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US dollar seeing some strength after flirting with lows last week, trading just under 92.
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Dow losing roughly 1700 points over the past week with the Fed shaking things up yesterday by raising its forecast for inflation and indicating they could lift benchmark interest rates sooner than expected.
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Export Sales were non-eventful for the week on most grains, but wheat was fairly decent with HRW leading the wheat pack at 4.8 million bushels. All wheat still sits slightly behind pace with HRW 25 behind USDA projections.
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Weekly Export Sales Snapshot |
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Weather
Hot and dry for the southern plains with little in the way of precipitation. Some chances for rains in Southwest Kansas on Monday night. Rains in the corn belt are expected over the next 6-10 days.|
Temperature 6-10 Day |
Precipitation 6-10 Day |
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Corn
An ugly and volatile market with today’s sharp downward move – December corn is down more than 50 cents on the week. Weather is the name of the game and the weather maps seem to be changing by the minute. Wetter, cooler weather in next week’s forecast for the corn belt and pockets of rain across Iowa are putting pressure on today’s market. Rain would be welcome though, as drought and heat stress pushed crop conditions lower than expected this week. with USDA dropping the good-to-excellent score from 72% last week to 68% this week. The biggest declines came in Minnesota and Iowa. Also putting a damper on the market, the Biden administration announced on Friday that they want to provide relief for oil refiners when it comes to biofuel blending laws. Export inspections this week were on the low end of estimates at 60.8 million bushels, up from last week’s 56.2 million. Export sales were lackluster at 0.7 million bushels of old crop and 10.9 million bushels of new crop. However, yesterday the USDA announced a flash sale of 6.0 million bushels to an unknown destination – the first daily sale since 5/27. Locally, basis remains steady and strong. Expect the market to stay volatile as the forecasts are ever-changing.
Wheat
Weather, weather, & weather has been the story this week for most of the grains. Future forecasts are cooler and wet in the corn belt contributing to the draw back we have seen this week. We will see if the rain is realized, last night western Iowa had thunderstorms roll through causing markets to be down this morning. The U.S. Dollar is also perking its head up today to go along with rains. Western and Southwestern Kansas look to stay hot and dry over the next 10 days with not much chance of rain right now. Export inspections report released this week showed 17.6 million bushels of wheat shipped with HRW leading the way with 7.5 million bushels. Export sales were within trade estimates this week coming in at 10.6 million bushels of wheat, HRW was the leader here as well with 4.8 million bushels. Export sales for wheat could start lagging due do the U.S. price for wheat being much higher than worldwide prices. KC wheat added 627 contracts according to the CFTC report from last Friday, bringing the net long to 19,713 contracts in managed money. With harvest kicking off this week we want all farmers to have a safe and successful harvest.
Soybeans
Beans have been the big losers for the week. Contributing factors are the cause of it, like the other grains weather and a strong Dollar are part of it, but soybean oil taking huge hits has caused the soybean board to take some damage too. Yesterday bean oil was limit down causing today to have expanded limits in beans, meal, and bean oil. May NOPA crush report was released Monday. Crush showed 163.5 million bushels, 1.6 million bushels below the average trade guess and below 169.6 million bushels last May, though up from the 160.3 mbu in April. Cumulative Sept-May crush stands at 1552.5 mbu, less than 20 mbu ahead of last year’s pace. Export inspections came in at 4.7 million bushels for last week shipped, this was below trade estimates. Export sales were within the trade guesses showing 2.4 million bushels of old crop this week. Crop progress report showed 94% of soybeans planted up from last week’s 90%. Kansas came in at 82% jumping up from 68% last week. Soybeans conditions are 62% good to excellent across the U.S. down from last week’s 67%- and 5-year average of 71%. Kansas is in-line with a typical year showing 65% g/e down from 66% last week, but above the 5-year average of 63% g/e. Soybeans added to there long position 2,695 contracts for a total of 141,483 according the CFTC report.
Milo
Milo is along for this ugly downward slide in corn futures, while local basis remains steady. USDA pegged the crop at 72% planted on Monday, while crop conditions were unchanged at 74% good-to-excellent. Export inspections were solid this week at 6.0 million bushels, up from last week’s 2.5 million. Export sales were a disappointment with a net cancellation of 0.2 million bushels of old crop and no new crop sales. It will be interesting to see if this sharp move lower in prices entices some export demand to come back to the table.
Trivia Answers
- Wheat originated in the “cradle of civilization” in the Tigris and Euphrates river valley, near what is now Iraq.
- A bushel of wheat makes about 42 pounds of pasta or 210 servings of spaghetti.