Morning Comments August 11, 2021

Grain Bins

Our markets were higher last night as the export pace is starting to pick up again. There were export sales announcements yesterday of soybeans to China, corn to Mexico, and soybean sales to “unknown destinations” (which tends to be secret code for China there, too). This demand is what some in the market have been waiting to see and seems to be putting a floor under our prices for now. Overall, it appears China has quite a few beans to buy for this Fall/Winter yet, which means we could see announcements like this almost daily here for a bit.

In other reports yesterday, CONAB (read: Brazil’s version of the USDA) cut their estimate of the Brazilian corn crop by over 7%, now down to 86.7MMT (from 94.3MMT last month). In tomorrow’s USDA report we will see fresh numbers from the USDA; their estimate for that crop was 93MMT in the July report. The Brazilian crop size is important to us at this time because it is assumed that the slippages in the crop down there will mean more corn exports out of the U.S., at least for winter and early spring (before the next Brazilian harvest).

After having said all that, tomorrow’s USDA report is still likely to be the driver for price action this week. Traders are expecting the USDA to cut the corn yield by just under 2bpa while the bean yield is expected to fade by maybe a half bushel per acre. While there are many other pieces to the S&D puzzle, any major deviations on the production/supply side of the equation from those estimates could cause a swift reaction in the futures markets. We will send the full trade estimates out first thing tomorrow morning, the report will be released at 11 a.m.

Currently

Corn is 4 to 6 cents higher

Soybeans are 12 to 18 cents higher