Grain Comments   10-21-2020

Good Morning!

Corn, bean and wheat futures are higher again this morning with nearby corn futures making new highs for the move, nearby beans took out last week’s high and KC wheat futures made new contract highs. Soybean futures continue to climb higher despite improved rain chances across much of South America. The US dollar index is at a 6 week-low while China’s yuan has rallied to its highest level in 2 years vs the dollar.

The weather outlook continues to show much-needed rainfall moving across an estimated 90% of Brazil’s growing region over the next 6 to 10 days. Rainfall is also expected to favor the southern areas of Argentina during the same timeframe.

A Bloomberg story is reporting China’s government has no intent in intervening with their record domestic price of corn. Record prices have been driven by the fast recovery of hog production, as well as demand for alcohol and starch.  The typhoon flattened region in the northeast will be hand-picked, which will increase costs.

Brazilian government statistic agency CONAB does not expect large quantities of soybean imports in the short term after the suspension of soy and corn tariffs outside of the Mercosur Trade Bloc. Also, the entity does not expect corn imports to change significantly through January 20121.

CONAB says it does not foresee a significant impact in 2020/21 soy production from delays in planting.

We anticipate today’s EIA ethanol production report to show production for the week ending October 16th near last weeks 937,000 barrels per day. Ethanol production over the past four weeks has averaged 4.23% below year ago levels. Central Iowa ethanol margins are estimated at breakeven to a few cents profit.
 

Have a great day!


Wayne Kollis - Mike Rosenberg - Matt Zeman - Austin Behrendsen - Grant Johnson