December 8, 2021
Good morning,
Corn is unchanged and soybeans are up 1 to start the day.
The USDA Crop Report is out tomorrow at 11:00 Central. Only minor adjustments are expected as this report has little bearing on the markets. South American production doesn’t move very far this early and those crop sizes are expected to be unchanged. Traders are looking for a small reduction in bean and wheat exports, with an increase in the corn grind from ethanol.
The December Trade Report showed US soybean exports for October at 386 million bushels. This is 42 million below last year’s record large sales and the second highest of all time. November is expected to be similar, with also the second largest sales of all time. China is behind 180 million bushels due to the September shutdown at the US Gulf. Overall sales are probably only down 240 million bushels from year to year, with many months to bridge some of that gap.
The U.S. EPA will reportedly reduce biofuel mandates, aiding refiners hit by the pandemic; annual ethanol mandates will go to 12.6 billion gallons for 2020, 13.8 billion for 2021, and 15.0 billion for 2022 (back to originally – mandated levels). The rejection of a significant number of small refinery exemptions is also expected by the EPA. The Biden Administration did announce $700 million in COVID-related biofuel industry grants at the same time, along with $100 million in biofuel infrastructure aid.
The forecast for South American weather looks unchanged. Northern Brazil will have chances for 2-5 inches of rain this week. Southern Brazil and Northern Argentina will be largely dry of the coming 10-15 days. Southern Argentina is expected to see .1-1.25 inches into Friday. Temps in Northern Brazil are normal and temps in Argentina are above normal.
Look for quiet markets today as traders will focus on the EPA announcement and tomorrows USDA report.
Have a Safe Day!
Garry Gard
920-348-6844
December 7, 2021
Good morning,
Markets are softer this morning with corn down 3 and soybeans down 5.
There wasn’t much news in the market session yesterday and its even less so far today. These are about the quietest overnight trades in corn, beans, and wheat we have seen for a long time. There is no new bearish input, but we still lack any bullish catalyst. Crude oil cracked 70 dollars this morning which puts it 7 dollars off the recent low and 15 dollars off the high. Ethanol markets have slipped in the last week which may have plants refiguring their Q1 plans if things don’t stabilize.
The EPA’s latest proposal to extend the deadlines for compliance dates under the Renewable Fuel Standard program has sparked some protests from groups representing the renewable fuels sector. “What we see is an admission that EPA will miss the statutory deadlines going forward, while making it easier to do so,” says Kate Shenk of the National Biodiesel Board. “EPA is acting as if there is no statutory deadline for promulgating annual rules.” Grains traders were looking for the EPA to release its new rules last week, and the lack of any new rules being released put pressure on corn and soybean futures. Both CBOT contracts are down again today, with corn down 0.9% and soybeans down 0.6%.
The White House said on Monday US government officials would boycott the Winter Olympics in Beijing. China opposes the boycott and would take “resolute countermeasures”, foreign ministry spokesman Zhao Lijian told a regular media briefing in Beijing, host city of the 2008 Summer Olympics, on Tuesday. “The United States will pay a price for its mistaken acts,” he said, without giving details. “Let’s all wait and see.”
Have a Safe Day!
Garry Gard
920-348-6844
December 6, 2021
Good morning,
Softer markets to start the week with corn down 5 and soybeans down 6.
Canada’s main crop came in above trade expectations in StatsCan’s December crop report on Friday, with all-wheat output at 21.7 MMT; that was 500k tonnes above the trade guess but still only steady with their previous projection, and their worst wheat crop since ‘07/08. Production of those six main crops (combined below) stands at just over 64 MMT for 2021, down from a record pushing 90 MMT in 2020 and the lightest output since the ‘07/08 season.
The forecast for South American weather looks unchanged from yesterday. Northern Brazil will have chances for 2-5 inches of rain this week. Southern Brazil and most of Argentina didn’t get much rain coverage over the weekend. Southern Argentina is expected to see .1-1.25 inches into Friday. Temps in Northern Brazil are below normal and temps in Argentina are heating up.
The USDA will release their monthly S&D report on Thursday. Trade expectations are for slightly lower stocks due to an increased ethanol demand number. 2021 production numbers will not be updated until the final report in January.
Look for the markets to continue their sideways trading range as we have nothing bearish or bullish going on in the marketplace.
Have a Safe Day!
Garry Gard
920-348-6844
November 29, 2021
Good morning,
Weaker markets to start the week as corn is down 9, soybeans are down 7 and wheat is down 13.
Following a trade shortened week where due to the holidays, traders appear to be taking some money out of the markets as we head towards first notice day for the December futures. The surprising thing here is that December corn is only 4-5 lower while future months are trading 9 lower.
Concern over the new Covid 19 variant may be directing the markets today. While scientists race to understand the consequences of the Omicron COVID-19 variant, one of the most important questions is whether this new version of the coronavirus can outrun the globally dominant Delta variant.
The World Health Organization on Friday designated Omicron a “variant of concern” just days after the variant was first reported in southern Africa. The WHO said it is coordinating with many researchers worldwide to better understand how the variant will impact the COVID-19 pandemic, with new findings expected within “days and weeks.”
US weather is going to be very dry over the next couple weeks. The maps show a drying trend out in the Plains and down into Texas. Temps are above normal for the time of year as a warm air doom has set up across the entire Western US. Dry warm weather may have some effect on the winter wheat crop, where conditions have not started out very good.
Today is a small reminder of what can happen at any given time. High prices are not guaranteed regardless of what input costs may be. If you can print in the black, you should consider making old and new crop sales.
Have a Safe Day!
Garry Gard
920-348-6844
November 22, 2022
Good morning,
Markets are higher to start the week with March (CH) corn up 4 and January (SF) soybeans up 10.
Today, the wheat market is the one making headlines and leading the charge. Wheat is up big across the board due to a wet forecast for Eastern Australia, the nation’s primary growing region for the commodity. The forecast now shows 1.5-4.5″ of rain in the coming period causing concern that harvest will be delayed and the seed quality will be diminished. This causes concern that the resulting crop will not be able to meet the milling demands of the nation’s Asian trade partners. Both Kansas City and Chicago wheat have posted fresh contract highs and are testing prices last seen in 2012.
The US forecast is little changed from last week. Most of the country remains in a dry, cool pattern. The updated forecast does show a fresh round of heavy rains for southeast Canada, the same region that was hit with heavy rains that caused tragic landslides recently. These new rains could spark more landslides and slow down grain export activity.
Its Thanksgiving week which means a short week for CBOT trade with the exchange closed on Thursday and an early (12pm) close on Friday. Look for thin markets this week with limited volume of trade.
Historically, CBOT have trended higher leading up to the Thanksgiving holiday. With wheat leading the charge, I expect that to be the case again this year. As the week goes on, the trade will be thin out and markets may see an uptick in volatility. I expect much of the week’s action to be done shortly after the open on Wednesday as traders leave the desk to enjoy the holiday break.
Have a Safe Day!
Garry Gard
920-348-6844
