Afternoon Market Recap for August 5, 2021

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Corn prices shift higher

Soybean and wheat contracts lightly mixed Thursday

Good afternoon! Grain prices were mixed once again today. Corn prices rose moderately higher after a round of technical buying partly inspired by fresh export optimism. Spring wheat also found fractional gains, while soybeans finished with narrowly mixed results and winter wheat prices faded as much as 0.5% lower amid a choppy session.

More rains are heading to the Midwest later this week, with parts of Iowa, Minnesota and Wisconsin set to receive another 1” or more between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally dry weather for much of the Midwest and Plains between August 12 and August 18, meantime, with warmer-than-normal conditions likely for much of the country.

On Wall St., the Dow tilted 183 points higher in afternoon trading to 34,976, anchored by gains in the travel and energy sectors. Energy futures bounced moderately higher, with crude oil gaining 1.25% this afternoon to make it just over $69 per barrel. Gasoline rose nearly 2%, with diesel up around 1.4%. The U.S. Dollar softened slightly.

On Wednesday, commodity funds were net buyers of soybeans (+3,000) and soymeal (+2,000) contracts but were net sellers of corn (-5,000), soyoil (-2,000) and CBOT wheat (-4,500).

Corn

Corn prices trended moderately higher Thursday after a round of better-than-expected export data from USDA this morning kicked off a round of technical buying that pushed nearby contracts more than 1.75% higher by the close. September futures rose 10 cents to $5.5575, with December futures up 6.5 cents to $5.5325.

Corn basis bids were largely unchanged across the central U.S. on Thursday but did move as much as 2 cents lower at an Ohio elevator and 2 cents higher at an Illinois river terminal today.

Corn exports saw 2.7 million bushels in old crop sales, plus another 32.7 million bushels in new crop sales, for a total tally of 35.4 million bushels last week. That was enough to exceed the entire range of trade estimates, which were between 2.0 million and 31.5 million bushels. Cumulative sales for the 2020/21 marketing year are almost a billion bushels ahead of last year’s pace, moving to 2.501 billion bushels.

Corn export shipments climbed 20% above the prior four-week average, to 55.5 million bushels. China accounted for the majority of that total, with 35.8 million bushels.

IHS Markit Agribusiness updated its forecast for 2021 U.S. corn production, which it now predicts at 14.911 billion bushels, with average yields of 176.5 bushels per acre.

Preliminary volume estimates were for 304,510 contracts, moving moderately ahead of Wednesday’s final count of 244,637.

Soybean

Soybean prices failed to find much traction Thursday, despite a round of decent export data from USDA along with a “bonus” large sale reported to unknown destinations this morning. August futures slid 2.5 cents lower to $14.01, while September futures picked up 3 cents to $13.35.

Soybean basis bids jumped 73 cents higher at an Illinois river terminal on Thursday and dropped as much as 10 cents lower at an Illinois processor. Most other Midwestern locations were steady to slightly soft today.

Private exporters announced to USDA the sale of 11.0 million bushels of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which begins September 1.

Soybean exports gathered just 419,000 bushels in old crop sales but added another 15.6 million bushels in new crop sales for a total of 16.0 million bushels last week. That was on the higher end of trade estimates, which ranged between 3.7 million and 23.9 million bushels. Cumulative totals for the 2020/21 marketing year still hold a substantial lead over last year’s pace, with 2.180 billion bushels.

Soybean export shipments dipped 4% below the prior four-week average, with 7.9 million bushels. Mexico was the No. 1 destination, with 2.4 million bushels.

IHS Markit Agribusiness is now predicting the 2021 U.S. soybean crop will reach a production of 4.464 billion bushels, with average yields hitting 51.5 bushels per acre.

Brazil’s Agroconsult lowered its estimates for the country’s 2020/21 second corn crop by 6.7% from a previous forecast as the country continues to struggle through overly dry conditions. The latest production estimate for the second corn crop fell to 2.398 billion bushels.

Preliminary volume estimates were for 116,044 contracts, tracking 19% lower than Wednesday’s final count of 142,833.

Wheat

Wheat prices ended Thursday’s session with lightly mixed results after an uneven round of technical maneuvering. Some winter wheat contracts fell as much as 0.6%, while spring wheat futures tacked on fractional gains. September Chicago SRW futures dropped 4.25 cents to $7.13, September Kansas City HRW futures eased 1.5 cents to $6.9275, and September MGEX spring wheat contracts inched half a penny higher to $9.0350.

Wheat exports fell 28% below the prior four-week average, to 11.3 million bushels. That was on the lower end of trade estimates, which ranged between 9.2 million and 25.7 million bushels. Cumulative sales for the first two months of the 2021/22 marketing year are off to a sluggish start, with 114.5 million bushels (versus year-over-year volume of 162.7 million bushels).

Wheat export shipments moved 12% higher week-over-week but inched 1% below the prior four-week average, to 14.2 million bushels. Mexico was the No. 1 destination, with 4.7 million bushels.

South Korea issued a tender to purchase nearly 5.0 million bushels from optional origins, including the United States, which closes tomorrow. The grain is for shipment in October if it is sourced from the U.S. or Canada; Australian-origin wheat is for shipment in December.

Japan purchased 3.4 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 October.

Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closes August 18. The grain is for shipment 40 days after a contract is signed.

Jordan issued a new international tender to purchase 4.4 million bushels of milling wheat from optional origins that closes August 11. The grain is for shipment in February and March.

Tunisia issued an international tender to purchase 3.7 million bushels of soft milling wheat and 4.6 million bushels of animal feed barley from optional origins that closes tomorrow. The grain is for shipment in August and September.

Preliminary volume estimates were for 129,463 CBOT contracts, coming in 14% below Wednesday’s final count of 149,853.

 

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Sep 560.75 545.75 555.75 10
21-Dec 558 545.75 553 6.5
Soybeans        
21-Sep 1347.75 1322 1335.75 3
21-Dec 1339.5 1315 1328.5 2.75
Soymeal                $/ton        
21-Sep 357.3 349.9 355.5 3.2
Soyoil                    cents/lb        
21-Sep 62.68 61.05 61.47 -0.75
Wheat                    $/bushel        
21-Sep 725.5 709.75 712.75 -4.25
21-Dec 737 722.25 725.25 -3
KC Wheat        
21-Sep 702.25 687.75 691.5 -1.5
21-Dec 713.75 699.5 703 -1.5
MPLS Wheat        
21-Sep 912.25 891 903.75 0.5
21-Dec 901 880 892.25 0.5
Live Cattle             cents/lb        
21-Aug 124.3 122.5 122.575 -1.475
Feeder Cattle         cents/lb        
21-Sep 163.025 160.975 161.075 -1.8
Lean Hogs             cents/lb        
21-Oct 89.7 87.125 87.125 -3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Sep 69.35 67.61 69.1 0.95
Diesel        
21-Sep 2.1081 2.06 2.104 0.0299
Unleaded Gasoline   $/gallon        
21-Sep 2.2972 2.2357 2.2965 0.0465
Natural Gas        
21-Oct 4.211 4.125 4.15 -0.013
Ethanol Futures        
21-Oct     2.207  
U.S. Dollar Index        
21-Sep 92.36 92.12 92.255 -0.019
Gold                      $/ounce        
21-Sep 1814.3 1796.7 1803.2 -7.3
Copper        
21-Aug 4.348 4.3345 4.3465 0.0165
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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