I pulled the Cost of Carry tables for corn, soybeans, and the three wheat futures markets at the end of August.

(Green spreads are showing carry. Red spreads are inverted.)

Key Takeaways:

  • Corn
    • The September-December spread closed at an inverse of 3.25 cents as September moved into delivery
      • The end of July saw this same spread close at a carry of 3.75 cents and covering 12% calculated full commercial carry (cfcc)
      • Indicating the 2021-2022 available stocks-to-use situation was tightening through the close of the marketing year.
    • The new-crop Dec22-to-July23 forward curve closed at a carry of 3.75 cents and covering 5% cfcc
      • As compared to the end of July at 10.5 cents carry and 14% cfcc
      • The reality is commercial traders have been concerned about 2022 production for over a year, and with combines starting to roll over parts of the western Corn Belt those concerns are being realized.
  • Soybeans
    • The September-November spread closed August at an inverse of 85.0 cents
      • The spread had followed the path of the August-September, hitting a high of $1.44 inverse on August 26
      • Old-crop supplies were tight through the end of the 2021-2022 marketing year
    • The Nov22-to-July23 spread closed at a carry of 7.25 cents and covering 6% cfcc
      • versus the previous month’s inverse of 10.25 cents
      • The market is still fundamentally bullish long-term. However, August rains seem to have increased the commercial outlook for production potential.
  • Kansas City (HRW) Wheat
    • The September-December spread closed at an inverse of 11.75 cents
      • As compared to the end of July close at a carry of 7.0 cents
      • The bottom line: US HRW supplies are tightening quickly
    • The Dec-March spread closed at an inverse of 1.25 cents
      • In fact, Kansas City spreads are inverted out through the new-crop July23-September23
    • Making Kansas City wheat one of the most fundamentally bullish markets in the grain and oilseed sector
  • Chicago (SRW) Wheat
    • The September-December spread closed at a carry of 22.5 cents and covering a bearish 89% cfcc
      • The end of July saw this same spread close at 18.0 cents carry and covering 73% cfcc.
    • The Dec-March spread closed at a carry of 16.25 cents and covering a neutral-to-bearish 64% cfcc
      • Telling us the 2022 SRW crop produced at or above expectations
        • while an expected increase in demand has not occurred
  • Minneapolis (HRS) Wheat
    • The September-December spread closed at a carry of 10.75 cents and covering a bullish 33% cfcc
      • The end of July saw this same spread close at a carry of 12.5 cents and covering 39% cfcc
      • The 2022 HRS crop continued to grow smaller during August
    • The Dec-March spread closed at a carry of 12.75 cents and covering 39% cfcc
      • as compared to the previous month’s close of 11.5 cents and 36% cfcc