Afternoon Market Recap for August 3, 2021

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Fair weather fouls grain prices.

Corn, soybeans and most wheat contracts land in the red Tuesday

Good afternoon! Grain prices were mostly lower on Tuesday, after mostly favorable weather forecasts triggered a round of technical selling that pushed corn prices 1.25% lower, while soybeans dropped 2% today. Most wheat contracts also trended lower, with the exception of Kansas City HRW futures, which held onto gains of around 0.5%.

Some light to moderate rains are returning to the Midwest and Plains later this week, with most areas set to get another 0.1” to 0.25” between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally wet weather is more likely between August 10 and August 16 for the eastern Corn Belt and Great Lakes region, according to NOAA’s 8-to-14-day outlook. Warmer-than-normal temperatures are likely for the entire central U.S. during this time.

On Wall St., the Dow moved 226 points higher in afternoon trading to 35,064, anchored by red-hot banking and industrial stocks. Energy prices saw moderate cuts, in contrast. Crude oil dropped more than 1% this afternoon to stay just above $70 per barrel on worries over global demand. Diesel dropped 0.5%, with gasoline down around 0.25%. The U.S. Dollar firmed fractionally.

On Monday, commodity funds were net sellers of soyoil (-1,500) contracts but were net buyers of corn (+12,500), soybeans (+4,500), soymeal (+3,000) and CBOT wheat (+13,500).

Corn

Corn prices incurred losses of around 1.25% Tuesday after a round of technical selling. Relatively cool weather this week, with some light rains also expected, was a major culprit for today’s declines, and spillover weakness from soybeans created additional headwinds. September futures dropped 7.75 cents to $5.51, with December futures down 7 cents to $5.5225.

Corn basis bids were steady to mixed Tuesday, tumbling as much as 30 cents lower at an Iowa river terminal while firming as much as 5 cents higher at a Nebraska processor today.

Corn quality dropped two points this past week, with 62% of the crop now in good-to-excellent condition. Another 27% is rated fair (up a point from last week), with the remining 11% rated poor or very poor (also up a point from last week). Physiologically, 91% of the crop is now silking – up from 79% a week ago and favorable to the prior five-year average of 86%. And 38% is now at the dough stage, up from 18% a week ago and also ahead of the prior five-year average of 33%.

Per the latest data from the European Commission, EU corn exports for the 2021/22 marketing year are trending slightly above last year’s pace, with 42.9 million bushels through August 1.

Chinese state grain stockpiler Sinograin plans to auction off another 2.0 million bushels of corn that had originally been imported from Ukraine on August 6. Sinograin has held a handful of similar auctions in June and July in an attempt to bolster supplies and cool high prices.

Taiwan purchased 2.2 million bushels of animal feed corn, likely sourced from South Africa, in an international tender that closed earlier today. The grain is for shipment between late October and early November.

Preliminary volume estimates were for 300,629 contracts, tracking moderately higher than Monday’s final count of 236,063.

Soybean

Soybean prices faced the steepest cuts today, losing 2% after a round of technical selling. More favorable forecasts through early August could boost production potential and hand out a greater likelihood this year’s crop will reach trendline yields or better. August futures dropped 26.5 cents to $13.9225, with September futures down 32 cents to $13.2425.

Soybean basis bids were widely variable Tuesday, jumping as much as 84 cents higher at an Iowa river terminal while eroding as much as 20 cents lower at a Nebraska processor today.

Soybean quality improved two points last week, with 60% rated in good-to-excellent condition. Another 28% of the crop is rated fair (down two points from last week), with the remaining 12% rated poor or very poor (unchanged from a week ago). Physiologically, 86% of this year’s soybean crop is now blooming, up from 76% a week ago and ahead of the prior five-year average of 82%. More than half (58%) is now setting pods, versus 42% a week ago and the prior five-year average of 52%.

European Union soybean imports for the 2021/22 marketing year reached 39.3 million bushels through August 1, a year-over-year decline of 25% so far. EU soymeal imports are also tracking moderately lower from a year ago, as are EU palm oil imports.

Preliminary volume estimates were for 170,818 contracts, trending 57% above Monday’s final count of 108,879.

Wheat

Wheat prices were mixed but mostly lower after an uneven round of technical maneuvering today, with spillover weakness from corn and soybeans applying a fair amount of downward pressure. September Chicago SRW futures dropped 4.75 cents to $7.2475 and September MGEX spring wheat futures faded 3.5 cents lower to $9.1925. Kansas City HRW contracts bucked the overall trend, with September futures firming 3.25 cents to $7.0675.

Spring wheat quality ratings actually improved a point this past week, but only 10% is rated in good-to-excellent condition. Compare that to year-over-year results of 73%. Another 26% of the crop is rated fair (up a point from last week), with the remaining 64% rated poor or very poor (down two points from a week ago). Harvest is now 17% complete, up from 3% a week ago and firmly ahead of the prior five-year average of 8%.

The winter wheat harvest is moving even closer to completion, with 91% progress through Sunday. That’s up from 84% last week and favorable to the prior five-year average of 86%. Eight of the top 18 production states are now 100% complete, according to USDA. Idaho has the furthest to go, at 47%.

European Union soft wheat exports during the first month of the 2021/22 marketing year reached 35.4 million bushels, which is a 35% decline from last year’s pace so far. EU barley exports are also trending moderately lower year-over-year.

Pakistan issued an international tender to purchase 14.7 million bushels of wheat from optional origins that closes August 23. The grain is for shipment between mid-September and the end of October.

Japan issued a regular tender to purchase 4.4 million bushels of food-quality wheat from the United States, Canada and Australia, which closes later this week. Of the total, 54% is expected to be sourced from the U.S. The grain is for shipment in October.

Taiwan issued an international tender to purchase 1.8 million bushels of grade 1 milling wheat from the U.S. that closes on August 6. The grain is for shipment between late September and early October.

Preliminary volume estimates were for 137,934 CBOT contracts, moving ahead of Monday’s final count of 111,620.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Sep 563.5 546.75 550.5 -7.75
21-Dec 565.25 547.25 551.75 -7
Soybeans        
21-Sep 1350.25 1312.75 1323.75 -32
21-Dec 1348 1308.75 1319.75 -33.5
Soymeal                $/ton        
21-Sep 355.5 346.6 347.5 -8.5
Soyoil                    cents/lb        
21-Sep 64.05 61.81 62.45 -1.35
Wheat                    $/bushel        
21-Sep 734.75 717.75 724.5 -4.75
21-Dec 745 728.25 734.75 -4
KC Wheat        
21-Sep 711.75 695.25 707.5 3.25
21-Dec 722.75 706.25 718.75 3.75
MPLS Wheat        
21-Sep 927.25 904 919.75 -3.5
21-Dec 916 893 907 -5
Live Cattle             cents/lb        
21-Aug 123.5 122.15 123.35 1.225
Feeder Cattle         cents/lb        
21-Sep 163.825 161.55 162.975 1
Lean Hogs             cents/lb        
21-Oct 91.55 89.775 91.525 2.025
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Sep 71.96 69.19 70.72 -0.54
Diesel        
21-Sep 2.1587 2.0892 2.1287 -0.0071
Unleaded Gasoline   $/gallon        
21-Sep 2.3033 2.2337 2.2718 -0.0029
Natural Gas        
21-Oct 4.053 3.921 4.039 0.101
Ethanol Futures        
21-Sep     2.22  
U.S. Dollar Index        
21-Sep 92.16 91.895 92.075 0.01
Gold                      $/ounce        
21-Sep 1814 1806.5 1809.4 -8.7
Copper        
21-Aug 4.424 4.363 4.364 -0.068
Fertilizer Swaps     (as of 07/30)  
DAP Tampa-index              655.0 0
DAP-New Orleans              672.4 0
Urea-New Orleans                47.0 5
Urea-Middle East              465.0 -10
Urea-Black Sea              450.0 -3
UAN (32%) New Orleans              322.4 8.27

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