Morning Comments October 15, 2021

Grain Bins

Values turned around and headed higher yesterday as strength in soy oil and spreads as well as renewed inflation chatter provided support. 

As we have talked about throughout the week, the fundamental picture for corn and soybeans isn't what is going to be the driving factor here in the short term. While we feel comfortable currently with the supply and demand situation as a whole, the uncertainty surrounding everything else economically and logistically related will keep prices supported.

Continued strength in the energy complex, as oil looks poised to close higher for the 8th straight week, will keep buyers interested especially when one considers ethanol and biodiesel are major demand components for corn and beans.

Domestic crude inventory gains continue to outpace analyst expectations each week, but it seems the idea that demand could potentially outpace supply growth in the months and years ahead is a larger force than the actual growth in supplies.

Ethanol production was higher on the week as expected with production levels getting back up to levels not seen since July. We did see a decent drawdown in stocks, though indicated gasoline demand was down on the week. Currently ethanol margins in some locations are the best seen for this date on record, with continued strength in margins anticipated through November. 

We are seeing some strength in cash values along the river market as well as the need to slow movement has waned with shipping capacity out of the Gulf coming back online and rain working to stretch out harvest in the Eastern Belt especially.

Looking ahead, we will finish out the week with export sales and NOPA crush figures to be released this morning. On the export side of things, we continue to anticipate decent progress when it comes to soybean sales with around a million metric tons of sales expected. Corn sales are expected to be decent as well as Mexico continues to show up as a buyer in the market. 

Crush is expected to be a touch lower versus August production as well as lower than a year ago, mostly on the back of reduced supply availability in the month of September. Soy oil stocks will likely get much of the attention in this morning's report as they have come in higher than expected in the last few reports.

Outside of exports and crush we really will just continue to focus on inflation chatter and where energy prices head. 

Corn up 5 to 6

Beans up 9 to 10