Afternoon Market Recap for April 13, 2021

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Why did corn trend 2% higher today?

Soybean and wheat prices also saw solid gains Tuesday

Grain prices were back in the green Tuesday, thanks to a round of technical and bargain buying today. Corn led the way, moving nearly 2% higher on export optimism and waning domestic and global supplies. Soybeans found more modest gains of around 0.5%. Most wheat contracts rose more than 1% in a sometimes-choppy session as traders returned their focus to widespread dry weather across the U.S. Plains.

Not much drought relief is to be expected in the Northern Plains through the rest of this week, either. The region will see only trace amounts between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. Parts of the Central and Southern Plains could see moderate rainfall during this time, however. NOAA’s 8-to-14-day outlook predicts a blanket of seasonally dry weather to return between April 20 and April 26, with cooler-than-normal temperatures also likely next week.

On Wall St., the Dow eased 31 points lower to 33,714, while the S&P 500 hit new record levels and the Nasdaq trended 1% higher. Investors were skittish about a halt to the Johnson & Johnson coronavirus vaccine but were optimistic about lower-than-expected inflation rates seen in March. Energy prices trended moderately higher today. Crude oil rose more than 1% to crest back above $60 per barrel, while gasoline and diesel each gained about 0.5% in afternoon trading. The U.S. Dollar softened moderately.

On Monday, commodity funds were net sellers of most grain contracts, including corn (-11,000), soybeans (-12,000), soyoil (-6,500) and CBOT wheat (-9,000) but were net buyers of soymeal (+1,000).

Corn

Corn prices moved nearly 2% higher on a round of technical and bargain buying Tuesday, partly spurred by dwindling domestic and world supplies. Traders were also focused on slower-than-expected plantings this past week (more on that below). May futures 11.25 cents to $5.8025, with July futures up 10.75 cents to $5.6675.

Corn basis bids were steady to narrowly mixed across the central U.S. Tuesday, moving as much as 2 cents higher at an Iowa ethanol plant while sliding as much as a penny lower at an Illinois river terminal today.

Across the top 18 production states, only 4% of the corn crop is in the ground through Sunday, per USDA. That was two points below analyst expectations, with an average trade guess of 6%. Still, planting has started off slightly quicker than the prior five-year average of 3%. Click here to learn more about yesterday’s crop progress report from USDA, out Monday afternoon.

What do traders think about when they look at planting pace? “Timeliness is more than a virtue for impressing neighbors and landlords,” explains grain market analyst Bryce Knorr. “A fast-planted corn crop has greater yield potential, while delays can limit bushels growers ultimately harvest. Traders like to see 85% of the corn crop planted by mid-May, though the long-term average is around 80%.” Knorr offers additional analysis in today’s Ag Marketing IQ blog – click here to learn more.

In Brazil, the dominant crop to produce ethanol is sugarcane. However, corn-based ethanol production there has jumped 58% this past year, and analysts expect to see another 25% increase this coming season. Corn-based ethanol currently comprises around 9% of Brazil’s total ethanol production.

South Korea purchased 2.6 million bushels of corn from optional origins in a private deal this week. The grain is for arrival in July.

Preliminary volume estimates were for 469,094 contracts, moving moderately ahead of Monday’s final count of 373,213.

Soybeans

Soybean prices found moderate gains in a somewhat choppy session Tuesday after some technical buying today. May futures added 7.25 cents to $13.8925, with July futures up 5.5 cents to $13.8450.

Soybean basis bids were steady to firm, jumping 10 cents higher at three Midwestern locations Tuesday and rising 3 to 6 cents higher at two interior river terminals today.

Chinese soybean imports surged year-over-year in March, nearly doubling year-ago volume by reaching 285.5 million bushels last month. The United States and Brazil continue to be by far the top two suppliers of the oilseed.

Brazil’s 2020/21 crops have faced plenty of adverse weather conditions this year, from drought early in the season to excessive rainfalls later on. Julio Bravo shares his thoughts on what’s been happening in his latest South American Crop Watch blog – click here to learn more.

Ahead of the next monthly crush report from the National Oilseed Processors Association (NOPA), analysts expect the group to report a March soybean crush of 179.179 million bushels. That would be the sixth largest monthly crush on record, if realized. The report will be released Thursday morning.

Farm Futures needs your help with the 2021 Feedback From the Field series! Each week throughout the season, FFTF offers readers on-the-ground insights to market-moving weather events as they happen. Click here to learn more about how to participate.

Preliminary volume estimates were for 225,168 contracts, fading below Monday’s final count of 255,985.

Wheat

Wheat prices earned a moderate bounce higher Tuesday on a round of technical buying partly spurred by dry conditions across the U.S. Plains and a flurry of overseas sales so far this week. A weaker U.S. Dollar contributed some additional tailwinds today. May Chicago SRW futures added 2.75 cents to $6.3075, May Kansas City HRW futures rose 6.5 cents to $5.8550, and May MGEX spring wheat futures gained 6.5 cents to $6.4925.

In the agency’s latest crop progress report, USDA showed spring wheat planting progress off to a better-than-expected start, with 11% planted through April 11 and jumping well above the prior week’s tally of 3%. That was three points ahead of the average trade guess of 8% and nearly double the five-year average of 6%.

For winter wheat, crop quality held mostly steady this past week, with 53% in good-to-excellent condition through Sunday. Another 30% is rated fair (down a point from last week), with the remaining 17% rated poor or very poor (up a point from last week). Physiologically, 5% of the crop is now headed, up from 4% a week ago and down from the prior five-year average of 7%.

France’s farm ministry expects 2021 all-wheat acres to improve 15% from a year ago, climbing to 12.108 million acres. France is Europe’s No. 1 wheat producer.

Japan is looking to purchase 3.3 million bushels of food-quality wheat from the United States in Canada in a regular tender that closes later this week. Of the total, 70% is expected to be sourced from the U.S.

A South Korean feedmill group purchased 2.4 million bushels of animal feed wheat from optional origins in a tender that closed earlier today. The grain is for arrival in late October.

Preliminary volume estimates were for 160,768 CBOT contracts, tracking moderately lower than Monday’s final count of 214,166.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 584.5 565.5 580 11.25
21-Jul 569.75 552.75 566.5 10.75
Soybeans        
21-May 1398.75 1378 1389.5 7.25
21-Jul 1394.25 1374.75 1384.75 5.5
Soymeal                $/ton        
21-Jul 407.3 399.5 400 -6.3
Soyoil                    cents/lb        
21-Jul 51.41 49.58 51.15 1.54
Wheat                    $/bushel        
21-May 637.25 628.25 629.75 2.75
21-Jul 640.5 631.25 633.5 3.25
KC Wheat        
21-May 587 576.25 584.75 6.5
21-Jul 594.75 584.25 592.75 6.5
MPLS Wheat        
21-May 650.25 641.5 649 6.5
21-Jul 658 649.5 656 6
Live Cattle             cents/lb        
21-Apr 123.325 122.25 122.45 -0.275
Feeder Cattle         cents/lb        
21-May 149.8 146.725 147.325 -2.375
Lean Hogs             cents/lb        
21-May 105.525 103.2 104.825 0.425
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-May 60.59 59.64 60.32 0.62
Diesel        
21-Apr 1.823 1.8011 1.8173 0.0093
Unleaded Gasoline   $/gallon        
21-Apr 1.9874 1.9646 1.9787 0.0087
Natural Gas        
21-Jun 2.713 2.614 2.703 0.06
Ethanol Futures        
21-Jun     1.94  
U.S. Dollar Index        
21-Jun 92.365 91.84 91.86 -0.284
Gold                      $/ounce        
21-May 1748.4 1722.5 1744.1 12.9
Copper        
21-Apr 4.041 4.0145 4.0405 0.0105
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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