Early Market Talk October 8, 2021


China rumors have markets higher overnight with the soybean complex leading the way. Nov soybeans up 9.25¢ at $1256 with soybean meal even & bean oil up 75¢/#. Wheat & corn quite to start the day. Dow implied slightly higher at the open, with energies stronger. Another contract high for cotton.

China news appearing to be mostly related to gulf purchases of soybeans in coming months. They are coming off October holiday. This should not be news that moves markets this time of year, but post-Ida the export market is looking for any sign of life. 

Total export sales of soybeans are lagging last year by 559 million bushel. Total export shipments of soybeans YTD are shown at 74 million bushels vs. 242 last year in the 5th week. The most recent Chinese flash sale of soybeans was on 9/27; prior to that: 9/17. Brazilian soybean supplies likely not available until late Jan – Feb. 

Soybean spreads weaker overnight. SXSF now out to -11^4 & SFSH trading at -10. Nobody called this 2 weeks ago, and it has ignited some bullish basis talk. Processors will have to bid against a carry for the first time in almost a year? New crop corn spreads unchanged. 

CZ22 & CZ23 still within 10¢ of contract high. Growers locking in inputs should heavily consider laying off risk in the new crop. $900 ammonia hurts a lot less at $4.80 (delivered) vs. $4.20......

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