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Afternoon Market Recap for April 12, 2021

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Technical selling snipes corn prices.

Soybeans and wheat prices also land in the red Monday

Grain markets started the week off on the wrong foot, with corn, soybeans and wheat all losing around 1.5% Monday after a round of technical selling as traders unwound a portion of very large net long positions for each grain. Dry forecasts for the central U.S. also brought some planting pressure into the mix today.

Later this week will bring a mix of wet and dry weather, depending on where you live. Much of the central Corn Belt should receive no measurable rainfall between Tuesday and Friday, while parts of the upper Midwest may gather another 0.25” or so during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts widespread seasonally dry weather for the central U.S. between April 19 and April 25, with cooler-than-normal conditions likely for the eastern half of the U.S. next week.

On Monday, the Dow retreated off record highs captured late last week, dropping 104 points in afternoon trading to 33,695. Investors remain watchful for a bevy of first-quarter corporate earnings report to be released later this week. Energy futures were mixed, as crude oil firmed 0.5% this afternoon to stay just below $60 per barrel. Gasoline was also up around 0.2%, with diesel facing small cuts. The U.S. Dollar softened fractionally.

On Friday, commodity funds were net buyers of corn (+3,500) and CBOT wheat (+7,500) contracts but were net sellers of soybeans (-6,000), soymeal (-4,000) and soyoil (-2,500).

Corn

Corn prices faded throughout Monday’s session on a round of fund selling, with planting pressure applying additional headwinds today. May futures dropped 9.5 cents to $5.6775, with July futures down 8.25 cents to $5.5450.

Corn basis bids were steady to mixed across the central U.S. Monday, moving as much as 2 cents higher at a Nebraska processor while sliding as much as 4 cents lower at an Iowa ethanol plant today.

Corn export inspections fell 27% from a week ago, landing at 62.4 million bushels. That was also on the lower end of trade estimates, which ranged between 47.2 million and 82.7 million bushels. China led all destinations, with 17.5 million bushels. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace, with 1.479 billion bushels.

Ahead of the next USDA crop progress report, out later this afternoon, analysts expect the agency to show corn plantings at 6% through April 11, up from 2% a week ago. Individual trade guesses ranged between 5% and 8%.

European Union corn imports for the 2020/21 marketing year have reached 471.2 million bushels through April 11, per the latest data from the European Commission. That’s 27% below last year’s pace so far.

The Biden administration submitted its priorities for 2022 spending, which includes a USDA budget of $27.8 billion. That would represent a 16% increase from this year if everything goes to plan. Additional funds would increase rural broadband access and more. Farm Futures policy editor Jacqui Fatka has the details here.

Preliminary volume estimates were for 373,263 contracts, which moderately trailed Friday’s final count of 485,120.

Soybeans

Soybean prices followed corn prices lower on a round of long liquidation from investment funds today. Traders are already bracing for the prospect of historically large U.S. acres and a potentially record-breaking harvest in Brazil. May futures fell 20 cents to $13.83, with July futures down 18.25 cents to $13.80.

Soybean basis bids held steady across most Midwestern locations to start the week, with one Illinois river terminal rising 2 cents higher today.

Private exporters reported to USDA two more large soybean sales this morning. The first is for 4.85 million bushels for delivery to China during the 2021/22 marketing year, which begins September. 1. The second is for 4.0 million bushels delivery to Bangladesh – half headed there in the current marketing year, with the remainder for delivery in 2021/22.

Soybean export inspections took another step back, dropping moderately week-over-week to 12.0 million bushels. That was still on the upper end of trade guesses, which ranged between 3.7 million and 14.7 million bushels. Indonesia topped all destinations, with 3.5 million bushels. Cumulative totals for the 2020/21 marketing year are vastly exceeding last year’s pace, reaching 2.014 billion bushels since September 1.

European Union soybean imports for the 2020/21 marketing year are at 422.6 million bushels through April 11, trending slightly above last year’s pace so far. EU canola imports are also tracking slightly higher year-over-year, with EU soymeal imports down moderately from a year ago.

Preliminary volume estimates were for 256,457 contracts, trending 13% above Friday’s final count of 226,104.

Wheat

Wheat prices fell on worries over export demand amid an improving Russian crop after the country’s IKAR consultancy upped its 2021 production forecasts to 2.976 billion bushels. That triggered a round of technical selling that pushed most contracts down around 1.5% today. Spillover weakness from corn and soybeans caused additional headwinds. May Chicago SRW futures fell 11 cents to $6.2775, May Kansas City HRW futures dropped 7.5 cents to $5.79, and May MGEX spring wheat futures lost 13 cents to $6.41.

Wheat export inspections saw a moderate week-over-week decline, falling to 16.8 million bushels. That was slightly on the higher end of trade guesses, which ranged between 11.0 million and 20.2 million bushels. The Philippines was the No. 1 destination, with 4.0 million bushels. Cumulative totals for the 2020/21 marketing year have slipped slightly below last year’s pace, with 786.5 million bushels.

Ahead of the next USDA crop progress report, out later this afternoon, analysts think the agency will show stable winter wheat conditions, with 53% of the crop rated in good-to-excellent condition through April 11. For spring wheat, analysts estimate that planting progress has reached 8%, up from 3% a week ago.

Once again, China has offered a large amount of wheat for domestic users at auction earlier today. The latest sale was for 18.9 million bushels, or 12.8% of the total amount on offer. The country has been drawing down its state wheat reserves to help local feed users deal with rising corn prices. Six large wheat auctions have been held since the beginning of March.

European Union soft wheat exports for the 2020/21 marketing year have reached 764.6 million bushels through April 11, trailing last year’s pace by 24.5% so far. EU barley exports this marketing year are fractionally above last year’s pace, with 280.2 million bushels.

Corn prices fell last Friday and again today, despite some bullish data from USDA’s monthly WASDE report. What does that signal, exactly? Larry Shonkwiler, senior agricultural economist with Advance Trading, Inc., did some investigation in today’s Ag Marketing IQ blog – click here to learn more.

Algeria issued an international tender to purchase 1.8 million bushels of durum wheat from optional origins that closes Wednesday. Algeria often purchases more grain than the nominal amount listed on these types of tenders.

Preliminary volume estimates were for 214,166 CBOT contracts, shifting slightly below Friday’s final count of 233,473.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 586 567.25 569 -9.5
21-Jul 571.25 554.25 556 -8.25
Soybeans        
21-May 1407.25 1379.5 1382 -20
21-Jul 1401.75 1374.75 1379 -18.25
Soymeal                $/ton        
21-Jul 407.8 402.7 406.1 0.6
Soyoil                    cents/lb        
21-Jul 50.9 49.15 49.58 -1.2
Wheat                    $/bushel        
21-May 639 623 628 -11
21-Jul 640.25 625.75 631.25 -9.5
KC Wheat        
21-May 588.5 575.75 579 -7.5
21-Jul 596 584 586.75 -7.75
MPLS Wheat        
21-May 654 638.5 642.75 -13
21-Jul 661 645.75 650.25 -12.5
Live Cattle             cents/lb        
21-Apr 123.775 122.5 122.7 -0.725
Feeder Cattle         cents/lb        
21-May 150.75 149.325 149.6 -0.025
Lean Hogs             cents/lb        
21-May 107.575 103.375 103.375 -3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-May 60.77 58.73 59.57 0.25
Diesel        
21-Apr 1.8426 1.7877 1.8064 -0.0012
Unleaded Gasoline   $/gallon        
21-Apr 1.9982 1.9435 1.9641 0.002
Natural Gas        
21-Jun 2.676 2.611 2.642 0.037
Ethanol Futures        
21-Jun     1.905  
U.S. Dollar Index        
21-Jun 92.335 92.005 92.155 -0.005
Gold                      $/ounce        
21-May 1743.2 1726.1 1726.7 -16.6
Copper        
21-Apr 4.037 4.02 4.037 -0.0135
Fertilizer Swaps     (as of 04/09)  
DAP Tampa-index              585.0 0
DAP-New Orleans              603.5 8
Urea-New Orleans              427.2 5
Urea-Middle East              370.0 -20
Urea-Black Sea              332.5 -5
UAN (32%) New Orleans              323.5 -4.41
 
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