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Review of Agriculture Commodity Prices - August 2021

Review of Agriculture Commodity Prices – August 2021


Corn

The cash price of corn fell 8.13% in the month of August and is up 68% from August 31, 2020.

The largest issues in the corn complex are production.

In terms of production, Brazil’s safrinha (second) crop is 89% harvested and yields are poor and quality is poor, so poor that some elevators are not accepting the crop.[1]  Yields are at a 10 year low and farmer are expected to collect 51.6 million tonnes , well below the 70.5 million tonnes last year.[2]  Also in production, Pro Farmer released their National Corn and Soybean Crop estimates – they estimate that the US. Corn crop at an average yield of 177.0 bushels per acre and the U.S. soybean crop at an average yield of 51.2 bushels per acre.[3]

Outlook: the outlook for Corn is strong.

Soybeans

The cash price of soybeans fell 7.64% in the month of August and is up 37% from August 31, 2020.

The largest issues in the soybean complex are production, weather and trade.

In the production area, Conab provided their first estimate of Brazil’s 2021/22 Corn and Soybean production on August 27th.  They estimate that Brazil will produce 141.26 million tons of soybeans in 2021/22 (an increase of 3.9%).  They also estimate that Brazil will produce 115.9 million tons of corn.[4]  Also in production, National Oilseed Processors Association (NOPA) announced that soybean crush was 155.105 million bushels of soybeans in July up 1.8% from June but down 10.2% from July 2020.[5]

In weather, the National Oceanic and Atmospheric Association (NOAA) increased the changes of a second La Nina during South American summer to 70%[6].  A La Nina is associated with below normal rainfall for southern Brazil and northern Argentina. 

In terms of trade, China’s July soybean imports fall on weak crushing margins.  In July, China bought 8.67 million tonnes of soybeans, down from 10.09 million tonnes in July 2020.[7]

Outlook: Soybeans also have a positive outlook.

Wheat

The cash price of wheat fell 2.48% in the month of August and is up 24% from August 31, 2020.

The biggest issues in the wheat market was weather and production.

The International Grains Council (IGC) reduce its outlook for the 2021.22 global wheat crop by 6 million tonnes to 782 million tonnes due to poor yields in Russia, Canada and the United States.[8]  French millers group indicated that flour will cost more due to additional work in separating good grain from poor grain – they indicated that the amount of flour will not change.[9]  Finally, the price of bread in Egypt increased for the first time in 44 years where subsidies have kept the poorest fed since the 1960.[10]

Outlook: out of the commodities, wheat has the weakest outlook.
 
[1] www.soybeanandcorn.com – august 31, 2021
[2] Reuters Inside Commodities – August 3, 2021
[3] The Weekly Scoop in Review – August 27, 2021
[4] www.soybeanandcorn.com – august 27, 2021
[5] Reuters Inside Commodities – August 17, 2021
[6] www.soybeanandcorn.com – August 23, 2021
[7] Resuters Inside Commodities – August 9, 2021
[8] Reuters Inside Commodities – August 29, 2021
[9] Reuters Inside Commodities – August 9, 2021
[10] Reuters Inside Commodities – August 9, 2021