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Afternoon Market Recap for Aug. 14, 2020

Corn, soybeans take a small step back.

 

Wheat firms but fails to tack on significant gains Friday

Grains were mixed but mostly lower as a wild week drew to a close. Corn and soybeans saw modest losses on a round of technical selling and profit-taking after prices jumped significantly higher earlier this week. Wheat tested small gains today, in contrast, but most contracts were unable to scrape up more than fractional gains in a somewhat choppy session.

The vast majority of the Corn Belt may only see small amounts of rainfall (0.10” or less) fall between Saturday and next Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts that seasonally dry weather will continue from August 21 to August 27, with warmer-than-normal conditions building back in the upper Midwest and Northern Plains during this time.

It was a relatively quiet day on Wall St., with some mixed economic data out earlier this week. The Dow edged 18 points higher in afternoon trading to 27,915. Energy prices were lightly mixed, with crude oil down 0.3% but staying just above $42 per barrel. Diesel ticked 0.2% higher, while gasoline jumped about 0.9% higher this afternoon. The U.S. Dollar softened moderately.

On Thursday, commodity funds were big net buyers of most grain contracts, including corn (+47,500), soybeans (+13,000), soymeal (+7,500) and CBOT wheat (+5,000) but were net sellers of soyoil (-4,000).

Corn prices saw a minor decline Friday amid some light technical selling and profit-taking, although they ended the week up big, with nearby contracts up 5.5% since Monday’s open. Prices will need to continue to recover to get more farmers above breakeven levels, however. Today, September futures eased 0.75 cents to $3.2450, with December futures down a penny to $3.3775.

Corn basis bids were narrowly mixed at several Midwestern ethanol plants and interior river terminals Friday but held steady elsewhere across the central U.S. today.

French consultancy FranceAgriMer saw a steep drop in the country’s corn quality, which has suffered from a recent heatwave where temperatures topped out at 104 degrees. Crop conditions crumbled from 74% rated in good-to-excellent conditions a week ago down to 65% through August 12.

Ukraine’s grain exports have gotten off to a sluggish start in the 2020/21 marketing year, trending 23% lower year-over-year. That includes 64.6 million bushels of corn exports since July 1.

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Preliminary volume estimates were for 429,287 contracts, dropping significantly below Thursday’s final count of 846,951.

Soybean prices also posted modest losses Friday, which were minimized by another large sale to China announced this morning. August futures dropped 3.75 cents to $9.0350, with September futures easing 0.25 cents to $8.96.

Soybean basis bids were largely steady across the central U.S. Friday but did tick 2 cents higher at an Iowa river terminal today. The processing plant in Cedar Rapids, Iowa, is closed until further notice after sustaining severe damage in Monday’s storms.

Private exporters reported to USDA the sale of 4.6 million bushels of soybeans for delivery to China – the eighth consecutive session this has happened. Today’s announcement is for delivery during the 2020/21 marketing year, which begins September 1.

According to analysis by the Iowa Soybean Association, Monday’s violent storms that raked across the Midwest impacted as much as 37.7 million acres of farmland, including 14 million acres in Iowa alone. “We knew it was big, but it's bigger than we even anticipated it would be in terms of the acres it affected,” according to ISA spokesperson Aaron Putze.

Prior to the next monthly report from the National Oilseed Processors Association (NOPA), analysts expect the group to report a July soybean crush of 172.015 million bushels, which would be moderately higher than June’s tally of 167.263 million bushels, if realized. NOPA’s official figures will be released on Monday morning.

Iran has reportedly purchased 130,000 metric tons of soymeal from South America in an international tender that closed earlier this week. Shipment will likely occur in September or October.

Preliminary volume estimates were for 140,574 contracts, moving significantly below Thursday’s final count of 303,210.

Wheat prices fought for small gains Friday on a light round of technical buying but were unable to make significant inroads, with the specter of large domestic and global stockpiles still looming in the background. Today, September Chicago SRW futures added 3.5 cents to $5.0025, September Kansas City HRW futures inched ahead 0.25 cents to $4.2525, and September MGEX spring wheat futures picked up 0.75 cents to $4.9775.

Ukraine’s economy ministry reports that 96% of the country’s 2020 winter wheat crop has been harvested, for a total of 937 million bushels so far. The country’s total grain production in 2020 is expected to fall 9.5% below last fall’s record harvest.

Drought conditions are threatening Argentina’s newly planted 2020/21 wheat crop, which has a footprint of about 16.062 million acres. The country’s Rosario exchange has yet to reduce its yield estimates, however, which range between 661 million and 698 million bushels. Argentina was the world’s No. 6 wheat exporter last year.

Turkey issued international tenders to purchase 14.3 million bushels of red milling wheat and another 4.0 million bushels of durum wheat, which close August 25. The grain is for shipment in September and October.

Pakistan purchased 2.2 million bushels of wheat, likely sourced from the Black Sea region, in a deal that closed earlier this week. The grain is for shipment in September.

Preliminary volume estimates were for 169,539 CBOT contracts, moving fractionally above Thursday’s final count of 168,547.

 

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Sep 325.25 321.5 324.5 -0.75
20-Dec 339.25 335.25 338 -1
Soybeans        
20-Aug 903 903 903.5 -3.75
20-Sep 897.5 891.75 897 -0.25
Soymeal                $/ton        
20-Sep 293.2 290.3 291.8 -1
Soyoil                    cents/lb        
20-Sep 31.34 30.99 31.06 -0.08
Wheat                    $/bushel        
20-Sep 507.75 493.5 500 3.5
20-Dec 516.75 503 509.5 3
KC Wheat        
20-Sep 433 422.25 425.25 0.25
20-Dec 443.75 433 435.75 0
MPLS Wheat        
20-Sep 505 496.25 497.5 0.75
20-Dec 518 510.25 512.25 0.5
Live Cattle             cents/lb        
20-Aug 107.975 106.7 107.55 0.5
Feeder Cattle         cents/lb        
20-Sep 147.875 146.325 146.7 -0.675
Lean Hogs             cents/lb        
20-Oct 53.475 52.15 53.075 0.725
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Sep 42.57 41.62 42.07 -0.17
Diesel        
20-Sep 1.2539 1.2317 1.2408 0.0027
Unleaded Gasoline   $/gallon        
20-Sep 1.253 1.2257 1.2456 0.0108
Natural Gas        
20-Oct 2.514 2.312 2.484 0.16
Ethanol Futures        
20-Sep 1.28 1.275 1.28 0.05
U.S. Dollar Index        
  93.41 92.995 93.085 -0.232
Gold                      $/ounce        
20-Sep 1958.3 1930.2 1941 -15.7
Copper        
20-Aug 2.8555 2.8535 2.8535 0.0495
Fertilizer Swaps     (as of 8/14)  
DAP Tampa-index      335.0 10
DAP-New Orleans      369.3 11
Urea-New Orleans      270.1 7
Urea-Middle East      280.0 9
Urea-Black Sea      253.0 18
UAN (32%) New Orleans      132.3 1.65
 
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