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

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

Key Takeaways:

  • Kansas City (HRW) Wheat
    • The September-December spread closed at a carry of 7.0 cents and covering 28% calculated full commercial carry (cfcc).
      • The end of June saw this same spread close at 7.0 cents carry and covering 36% cfcc.
    • The Sept22-to-May23 forward curve closed at a carry of 13.75 cents and covering 20%
      • As compared to the end of June’s close at a carry of 10.75 cents and 16% cfcc
    • Most of the HRW harvest was completed during July, and the futures spreads remained bullish. This tells us production was less than expected.
  • Chicago (SRW) Wheat
    • The September-December spread closed at a carry of 18.0 cents and covering a bearish 73% cfcc
      • The end of June saw this same spread close at 16.5 cents carry and covering 68% cfcc.
    • The Sept22-to-May23 forward curve closed at a carry of 44.0 cents and covering a neutral 68% cfcc
      • The previous month’s close was a carry of 31.75 cents and covering 64% cfcc
    • Unlike HRW, SRW harvest has been coming in at least as large as expected
      • On the demand side, the US didn’t see the expected boost and early Monday morning we see the first ship leaving the port of Odesa.
  • Minneapolis (HRS) Wheat
    • The new-crop September-December spread closed at a carry of 12.5 cents and covering 39% cfcc
      • The end of June saw this same spread close at a carry of 13.25 cents and covering 42% cfcc
      • The new-crop HRS wheat outlook remains neutral-to-bullish with better weather during July offset by a reduced planted acres earlier this spring.
  • Soybeans
    • The August-September spread closed July at an inverse of $1.4975
      • As the August contract headed into delivery
    • New-crop November-January closed at a carry of 6.5 cents and covering 24% cfcc
      • as compared to the June close at a carry of 4.25 cent and 16% cfcc
      • indicating the crop improved over the course of the month
    • The Nov22-to-July23 forward curve closed at an inverse of 10.25 cents
      • versus the previous month’s inverse of 12.75 cents
      • The bottom line is the commercial side remains convinced the tight US supply and demand situation won’t be solved during the 2022-2023 marketing year.
  • Corn
    • The September-December spread closed at a carry of 3.75 cents
      • The end of June saw this same spread close at an inverse of 9.0 cents
      • Indicating the old-crop supply and demand situation loosened slightly in relation to new-crop during July
    • The new-crop Dec22-to-July23 forward curve closed at a carry of 10.5 cents and covering 14% cfcc
      • The 2022 crop looks to have improved over the course of the month, though not enough to threaten a move out of bullish territory
      • As with soybeans, commercial traders remain concerned about the long-term US corn supply and demand situation.