Interesting session at the CBOT. The September contracts are approaching their delivery periods, volume is thin and they were on the wild side today. Especially the soybean contract that traded from 43 lower to a penny higher on the day, and then closed 8 1/4 lower. The new crop November contract finished 3 lower, December corn was 3 cents higher and December wheat was down 6 3/4. Spring wheat went the other direction today with the Sep contract up 7 3/4 on the day. The $9.53 contract high set two weeks ago might be a target.
Federal Reserve chief Jerome Powell said this morning the central bank will begin tapering off the buying of bonds before the end of 2021. The trade took this as a sign the economy is headed in the right direction. The DJIA was up 242 points today. Late in the session nearby crude oil was up $1.30 per barrel. The dollar was down about .400 points. Gold was up $26. The October hog contract was on the move today as well, up $2.825 and closed at the $90.725 level. It’s up $7.40 from the low two weeks ago.
Recent rains and more on the way has kept the bulls at bay in recent days. In the map below, you can see what’s expected for beneficial rains across the Midwest the next 7 days. On the other hand, the excessive rains expected in the coming days from Hurricane Ida for the Delta agricultural growing areas was actually a supportive factor today. As of Monday morning, 76% of the Mississippi corn crop was mature……but, only 21% had been harvested. Only 4% of their soybean crop is mature. The yellow areas in the map are 10-20 inches of rain!?! The brown and orange areas are 5-10 inches. This will NOT be good for crops (including rice and cotton) in the path of this storm.
USDA reported more flash sales this morning. Columbia bought another 5.9 million bushels of corn. They bought 3.9 million yesterday. China was also in for another 4.7 million bushels of beans. That makes it 19 million bushels on the week to China or Unknown. It’s a total of 109 million bushels so far this month. StoneX reported this morning that total new crop soybean sales to China are now at 242 million bushels which looks impressive, but is only HALF what they had booked a year ago this time. However, we must point out that new crop 2020 soybean futures traded as low as $8.65 the month of August 2020. A year ago today the contract closed at $9.31 1/2. Compare that to the Nov 21 contract close this afternoon at $13.23 1/4. It traded as high as $14.80 back on June 7. Our point is that the Chinese are savvy traders and they’ve not booked as many beans this year as they did a year ago LIKELY because beans were at “bargain basement” levels last summer.
Oats knows. That’s an old expression in the grain trade. We don’t think it’s very relevant in this day and age. But, it is interesting to look at an oats chart. The nearby contract was up about 9 cents today and settled at $5.18 which is THE highest close in history! In fact, oats have only been above the $5 level once before and that was back in March 2014. Of course, the oats crop has been under severe drought stress in the upper Midwest. More than 40% of the oats crop is in MN, ND and SD. The USDA put the total projected oats crop two weeks ago at 37% lower from last year. As of Monday morning, just 45% of the ND crop had been harvested. So, producers are likely finding a crop under-performing and the trade is catching on. The nearby oats contract is up about 75 cents from last month’s low and up more than $2.50 from a year ago!
A Wall Street Journal article two weeks ago (8/9/21) caught our attention titled, “Biden’s Electric-Car Ambitions Face Real-World Roadblocks”. President Biden signed an executive order the first week of August calling on sales of electric (EVs), fuel-cell and plug-in hybrids to account for 50% of car and light truck sales by 2030! Auto makers say they could meet a target close to that IF and ONLY IF Congress approves spending of billions of dollars to build out a network of charging stations and provides consumer tax incentives for buying the vehicles. EVs currently account for about 3% of auto sales. The President has made transportation a central part of his agenda on climate change. This sector is the U.S. top source of greenhouse gas emissions. Scientists claim our vehicles contribute more than a quarter of our country’s planet-warming gases. Of course, one can dispute some of these claims. But, it is a fact the rest of the world is moving towards green energy. China has become a world leader in batteries and EVs, which is a long-term threat to U.S. manufacturing.
That’s all for now, have a nice weekend.
