Afternoon Market Recap for April 22, 2021

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Corn goes limit up again.

Soybean and wheat prices also trend substantially higher Thursday

Less than a month ago, USDA’s bullish set of planting intentions data from March 31 sent corn prices limit up. Today, corn prices received an encore after locking limit up around 10:45 a.m. as the latest weather rally continued to heat up. Historically tight supplies for both corn and soybeans has traders concerned about the seasonally cool, wet weather that is pumping the brakes on planting progress. Corn tracked 4% higher today, with soybeans up nearly 2.5%. Wheat prices also soared, with most contracts adding more than 5% today on worries over winterkill damage in the U.S. Plains, coupled by overall strong demand.

There may not be many more crops planted for the rest of this week after more cool, wet weather is likely for much of the central U.S. Most areas will see at least some measurable rainfall, although totals will rarely exceed 0.25” between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook does predict a return to near-normal temperatures between April 29 and May 5, with equal chances of wet or dry weather during this time for the Midwest and Plains.

Fears over the potential for higher capital gains taxes pushed the Dow down 294 points in afternoon trading to 33,842. The Biden Administration has proposed taxing income above $1 million at a rate of 39.6%, versus the current rate of 20% - a move that created some selling pressure today. Energy prices were lightly mixed. Crude oil gained nearly 0.4%, staying above $61 per barrel. Diesel rose more than 0.5%, with gasoline down around 0.25% this afternoon. The U.S. Dollar firmed moderately.

On Wednesday, commodity funds were once again net buyers of all major grain contracts, including corn (+27,500), soybeans (+12,000), soymeal (+1,000), soyoil (+8,500) and CBOT wheat (+9,000).

Corn

Corn prices made significant inroads again on Thursday as a convergence of bad weather, strong demand and dwindling supplies spurred another round of technical buying today. May and July futures each locked limit up this morning, moving 25 cents higher to close at $6.5050 and $6.3150, respectively. May futures have risen about 33% higher so far year-to-date.

Corn basis bids were steady to firm on Thursday after rising 1 to 6 cents higher across four Midwestern locations today, amid slow sales and improved demand.

Old and new crop corn sales saw a total tally of 30.0 million bushels for the week ending April 15. That was near the middle of trade guesses, which ranged between 13.8 million and 43.3 million bushels. Cumulative totals for the 2020/21 marketing year are still close to doubling last year’s pace, with 1.551 billion bushels.

Corn export shipments were more robust, but still shifted 18% below the prior four-week average to 63.2 million bushels. China was the No. 1 destination, with 22.1 million bushels.

Argentina’s Rosario grains exchange has upped its forecast for the country’s 2020/21 corn production to 1.968 billion bushels, citing more planted acres and good yields in the Cordoba province, where record yields are likely. Argentina is the world’s No. 3 corn exporter.

Preliminary volume estimates were for 511,243 contracts, tracking 12% above Wednesday’s final count of 455,703.

Soybeans

Soybean prices trended nearly 2.5% higher Thursday as tight domestic supplies, firm demand and the prospect of later planted crops kicked off another round of technical buying today. May futures jumped 36.5 cents to $15.3375, with July futures up 35 cents to $15.1450.

Soybean basis bids tilted as much as 10 cents higher at an Illinois processor and rose 1 to 5 cents higher at four other Midwestern locations today.

Old crop soybean sales were down another 29% week-over-week, with just 2.4 million bushels. New crop sales found another 11.6 million bushels, for a total of 14.0 million bushels. That was near the middle of analyst estimates, which ranged between 5.5 million and 27.6 million bushels. Cumulative totals for the 2020/21 marketing year are maintaining a large lead over last year’s pace, with 2.048 billion bushels.

Soybean export shipments fell 47% below the prior four-week average to a marketing year low of 8.3 million bushels. Mexico was the No. 1 destination, with 2.7 million bushels.

Want to learn more about how this week’s weather conditions are converging with already strong supply and demand fundamentals? We took a look at the current situation in the latest Midweek Markets podcast – click here to listen.

And looking for more insights into U.S.-China trade relations? A former ag trade negotiator, Gregg Doud, will be among the featured speakers at the 2021 Farm Futures Business Summit, set to take place live at the Coralville Marriott Hotel and Conference Center near Iowa City on June 16-17. Click here to learn more about this event and how to register.

Preliminary volume estimates were for 339,250 contracts, trending moderately above Wednesday’s final count of 259,691.

Wheat

Wheat prices tracked as much as 5.5% higher Thursday on a round of technical buying triggered by worries over late-planted spring wheat and lower quality and yield potential for winter wheat. May Chicago SRW futures rose 37 cents to $7.1025 (clearing $7 per bushel for the first time in seven years), May Kansas City HRW futures climbed 35.75 cents to $6.6650, and May MGEX spring wheat futures added 30.5 cents to $7.09.

Wheat exports saw 8.8 million bushels in old crop sales plus another 13.7 million bushels in new crop sales for a total of 22.5 million bushels. That was toward the higher end of trade guesses, which ranged between 7.3 million and 25.7 million bushels. Cumulative totals for the 2020/21 marketing year have slipped slightly below last year’s pace, with 784.4 million bushels.

Wheat export shipments improved 11% versus the prior four-week average, reaching 20.6 million bushels. The Philippines led all destinations, with 4.8 million bushels.

Russia’s IKAR consultancy has lowered its expectations for the country’s 2021 wheat crop by around 55 million bushels, for a total production of 2.921 billion bushels. Some areas face replanting issues after adverse weather this winter. Russia is the world’s No. 1 wheat exporter.

As expected, Japan purchased 3.1 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Of the total, 70% was sourced from the U.S. The grain is for shipment in June.

China has been an active buyer of French wheat, recently booking purchases of at least 18.4 million bushels to be shipped between July and September. The grain is expected to go to mills and for animal feed use. France has also sold more than 45.9 million bushels of new crop barley to China since last November.

Preliminary volume estimates were for 246,779 CBOT contracts, nearly doubling Wednesday’s final count of 135,075.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 650.5 623.5 650.5 25
21-Jul 631.5 604.5 631.5 25
Soybeans        
21-May 1543 1498.25 1533.25 36.5
21-Jul 1524 1480 1514.25 35
Soymeal                $/ton        
21-Jul 427.9 416.2 425.3 8.1
Soyoil                    cents/lb        
21-Jul 59.44 56.93 58.95 2.22
Wheat                    $/bushel        
21-May 713.25 672 710.25 37
21-Jul 715 674.25 710.5 35.5
KC Wheat        
21-May 670.75 630.75 667.5 35.75
21-Jul 677.75 638 674.75 35
MPLS Wheat        
21-May 717.25 678.75 678.5 30.5
21-Jul 724.25 685.25 685.25 30.5
Live Cattle             cents/lb        
21-Apr 119.775 117.4 118.15 -1.625
Feeder Cattle         cents/lb        
21-May 139.825 135.45 136.95 -2.65
Lean Hogs             cents/lb        
21-Jun 105.925 102.975 103 -1.525
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-May 61.87 60.61 61.63 0.28
Diesel        
21-May 1.8673 1.8383 1.864 0.0103
Unleaded Gasoline   $/gallon        
21-May 1.997 1.9608 1.9799 -0.0035
Natural Gas        
21-Jun 2.86 2.735 2.832 0.056
Ethanol Futures        
21-Jun     2.199  
U.S. Dollar Index        
21-Jun 91.415 90.97 91.345 0.216
Gold                      $/ounce        
21-May 1797.2 1776.8 1783.7 -8.6
Copper        
21-Apr 4.2845 4.2675 4.2675 -0.019
Fertilizer Swaps     (as of 04/16)  
DAP Tampa-index              595.0 10
DAP-New Orleans              596.9 -7
Urea-New Orleans              407.3 -20
Urea-Middle East              342.5 -28
Urea-Black Sea              330.0 -3
UAN (32%) New Orleans              322.4 -1.1
 
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