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Afternoon Market Recap for Aug. 10, 2020

Corn prices test modest gains.

Soybean prices also move higher, while wheat prices stay in the red Monday

Grain prices were mixed but mostly higher Monday, with traders expecting crop quality ratings to remain stable or move slightly lower in USDA’s next crop progress report, out later this afternoon. A trio of large soybean sales to China and unknown destinations lent further support to soybean prices. Wheat prices tilted lower, in contrast, with worries over large domestic and global stocks still creating downward pressure for now.

The Corn Belt should see some wet weather later this week, with up to 1” or more in a few Midwestern states between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Further out, expect seasonally cool weather to creep into the eastern Corn Belt between August 17 and August 23, per NOAA’s 8-to-14-day outlook. Drier-than-normal conditions may also emerge in the upper Midwest and Northern Plains during this time.

On Wall St., hot-performing industrial stocks helped lift the Dow more than 300 points in afternoon trading to 27,743. Energy futures also firmed, with crude oil up nearly 1.75% this afternoon to climb just below $42 per barrel. Gasoline was also up around 1.75%, with diesel rising 1.4%. The U.S. Dollar firmed slightly.

Last Friday, commodity funds were net sellers of all major grain contracts, including corn (-15,000), soybeans (-9,000), soymeal (-1,000), soyoil (-4,000) and CBOT wheat (-5,000).

Corn prices trended nearly 1% higher Monday as traders eye current drought conditions across some areas of the Corn Belt (Iowa, in particular), although rains may bring relief later this week. A round of technical buying pushed September futures 3 cents higher to $3.1075, while December futures rose 2.75 cents to $3.2350.

Corn basis bids were mixed to start the week, moving as much as 4 cents higher at an Illinois river terminal while dropping as much as 3 cents lower at an Illinois processor today.

Corn export inspections firmed 58% above the prior week week’s total to reach 45.3 million bushels. But cumulative totals for the 2019/20 marketing year have fallen more than 255 million bushels behind last year’s pace, with a total of 1.541 billion bushels. China was the No. 1 destination last week, with 10.4 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to hold corn quality ratings steady from a week ago, with 72% rated in good-to-excellent condition through August 9.

European Union corn imports for the 2020/21 marketing year are trending down 49% year-over-year so far, at just 52.8 million bushels through August 9.

Expecting bearish results when USDA releases its next World Agricultural Supply and Demand Estimates (WASDE) report on Wednesday morning? There are four things you can do to manage that risk, according to Dave Fogel, vice president of Advance Trading, Inc. Fogel walks through the particulars in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 390,523 contracts, jumping moderately ahead of Friday’s final count of 302,718.

Soybean prices also moved higher Monday, primarily due to two factors. First, crop quality ratings are expected to decline slightly when USDA releases its next weekly crop progress report later this afternoon. Second, three large export sales were announced this morning, which are headed to China and unknown destinations. August futures gained 6.25 cents to $8.7650, while September futures added 4.75 cents to $8.7050.

Soybean basis bids trended 3 cents lower at an Iowa processor Monday while holding steady elsewhere across the central U.S.

Private exporters reported three separate large soybean sales this morning. The first two were for a total of 21.6 million bushels for delivery to China during the 2020/21 marketing year, which begins September 1. The third was for 4.1 million bushels to unknown destinations, also for delivery in 2020/21.

Soybean export inspections trended moderately higher week-over-week, reaching 23.4 million bushels. The Netherlands topped all destinations, with 5.3 million bushels. Cumulative sales for 2019/20 are falling further behind last year’s pace as the current marketing year draws to a close, however, now at 1.474 billion bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to dock soybean quality ratings a point, moving it down to 72% rated in good-to-excellent condition for the week ending August 9.

European Union soybean imports for the 2020/21 marketing year, which started July 1, have reached 63.9 million bushels through August 9, which is 9% above last year’s pace so far. But EU soymeal imports are down 30% year-over-year, with EU canola imports tumbling 47% below last year’s pace.

Egypt purchased 64,500 metric tons of soyoil in a local tender earlier this week, which is for delivery in October.

Preliminary volume estimates were for 154,169 contracts, down slightly compared to Friday’s final count of 168,066.

Wheat prices faced small to moderate declines Monday on worries that Russia’s massive crop will create headwinds for U.S. exports, which already face stiff overseas competition. September Chicago SRW futures dropped 4 cents to $4.9150, September Kansas City HRW futures eased 1.25 cents to $4.1425, and September MGEX spring wheat futures lost 4 cents to $4.9050.

Wheat export inspections fell moderately lower week-over-week, landing at just below 14.0 million bushels. Cumulative volume for the 2020/21 marketing year are maintaining a slim lead over last year’s pace for now, with 186.2 million bushels. Japan led all destinations, with 3.2 million bushels.

Prior to this afternoon’s weekly crop progress report from USDA, analysts expect the agency to leave spring wheat quality ratings unchanged, with 73% of the crop rated in good-to-excellent condition through August 9. Harvest progress was expected to move from 5% complete up to 14% this past week. And winter wheat harvest progress was expected to move from 85% up to 91% as of Sunday.

European Union soft wheat exports for the 2020/21 marketing year are down 61% from last year’s pace so far after reaching just 36 million bushels through August 9. EU barley exports are also down 51% year-over-year.

Ukraine wheat exports are also off to a sluggish start this marketing year, with 69.1 million bushels sold since July 1, although analyst APK-Inform thinks total wheat exports could still reach 635.7 million bushels this marketing year. The country has also exported 19.6 million bushels of corn so far in 2020/21.

Russian wheat exports over the first half of 2020 rose 17% higher year-over-year to 457.4 million bushels, at a value of around $2.68 billion. The country is bracing for a very large wheat crop this year, with IKAR estimating production could top 2.976 billion bushels. The consultancy predicts Russia’s wheat exports could reach 1.360 billion bushels during the 2020/21 marketing year.

Preliminary volume estimates were for 153,667 CBOT contracts, dropping 17% below Friday’s final count of 185,030.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Sep 311.75 307.5 310.5 3
20-Dec 323.75 320.5 323 2.75
Soybeans        
20-Aug 878.25 869.5 876.5 6.25
20-Sep 872.75 863.25 870 4.75
Soymeal                $/ton        
20-Sep 286 282 284.4 2.6
Soyoil                    cents/lb        
20-Sep 30.98 30.61 30.73 -0.09
Wheat                    $/bushel        
20-Sep 497.25 490 491 -4
20-Dec 505 498.5 499.75 -4
KC Wheat        
20-Sep 417.25 410 414 -1.25
20-Dec 428.5 422.25 426 -1.5
MPLS Wheat        
20-Sep 494.25 490.5 490.75 -4
20-Dec 510 506.5 507 -2.5
Live Cattle             cents/lb        
20-Aug 103.85 102.575 103.7 0.9
Feeder Cattle         cents/lb        
20-Sep 145.725 143.975 145.65 0.525
Lean Hogs             cents/lb        
20-Oct 54.15 51.5 53.875 2.9
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Sep 42.33 41.17 41.99 0.77
Diesel        
20-Sep 1.2444 1.2217 1.2395 0.0196
Unleaded Gasoline   $/gallon        
20-Sep 1.2491 1.2081 1.2334 0.0258
Natural Gas        
20-Oct 2.401 2.254 2.285 -0.091
Ethanol Futures        
20-Oct     1.179  
U.S. Dollar Index        
  93.685 93.275 93.55 0.138
Gold                      $/ounce        
20-Sep 2047.3 2015.7 2017.7 7.6
Copper        
20-Aug 2.8695 2.823 2.865 0.0745
Fertilizer Swaps     (as of 8/7)  
DAP Tampa-index              325.0 9
DAP-New Orleans              358.3 2
Urea-New Orleans              263.5 23
Urea-Middle East              271.5 12
Urea-Black Sea              235.0 10
UAN (32%) New Orleans              130.6 1.1
 
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