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Afternoon Market Recap for Dec. 3, 2020

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Soybeans rebound with double-digit gains.

Corn prices firm moderately Thursday, with wheat prices back in the red

Grain prices were mixed once again on Thursday. Soybeans led the way, carving out double-digit gains on a round of bargain buying after falling to two-week lows on Wednesday. Uncertainty over Brazil’s production potential lent some additional support. Corn also firmed on some bullish export sales and shipment data from USDA this morning. But wheat landed in the red again as production potential among overseas competitors such as Canada and Australia is expected to rise.

The entire Corn Belt is unlikely to see much more than trace amounts of rain or snow between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Drier weather could persist throughout the central U.S. between December 10 and December 16, according to NOAA’s 8-to-14-day outlook, which also predicts seasonally average temperatures for most of the U.S. during this time.

On Wall St., the Dow moved another 134 points higher to 30,018, anchored by a 7% spike in Boeing shares and better-than-expected labor data. Energy prices also made moderate inroads today. Crude oil was up nearly 1% in afternoon trading to stay above $45 per barrel. Gasoline rose around 1.5% higher, with diesel up 2%. The U.S. Dollar softened moderately.

On Wednesday, commodity funds were net buyers of corn (+12,500) and CBOT wheat (+10,500) contracts but were net sellers of soybeans (-8,500), soymeal (-3,500) and soyoil (-1,500).

Corn

Corn prices moved moderately higher Thursday on a round of technical buying spurred by export optimism and spillover strength from soybeans. December futures gained 3.25 cents to $4.2225, while March futures added 2.5 cents to $4.2625.

Corn basis bids were steady to mixed Thursday, moving as much as 4 cents lower at an Iowa river terminal while firming as much as 6 cents at an Ohio elevator today. Farmer sales have been generally slow this week.

Corn export sales fell 14% below the prior four-week average, with 54.0 million bushels but made it to the high end of trade estimates, which ranged between 31.5 million and 63 million bushels. Mexico was the top buyer, with 25.9 million bushels. Cumulative sales for the 2020/21 marketing year are maintaining a healthy lead over last year’s pace, with 408.4 million bushels.

Corn export shipments made it to a marketing-year high, meantime, with 42.2 million bushels. China was the No. 1 destination, with 18.7 million bushels.

South Korea purchased 2.5 million bushels of corn from optional origins in a private deal earlier this week. The grain is for arrival by the middle of June.

The deadline of December 11 to apply for USDA’s Coronavirus Food Assistance Program 2 is rapidly approaching. Through November 30, the agency had already approved more than 700,000 applications for payments totaling $11.1 billion. Corn growers topped the list of payments, with cattle producers coming in next. Click here to learn more.

Preliminary volume estimates were for 273,492 contracts, sliding 12% below Wednesday’s final count of 309,866.

Soybeans

Soybean prices slugged through a choppy session Thursday, picking up double-digit gains along the way on a round of bargain buying and a report from a Brazilian consultancy that downgraded the country’s soybean production potential by more than 3%. January futures rose 13.75 cents to $11.6675, with March futures up 14 cents to $11.6875.

Soybean basis bids ticked 2 cents higher at an Ohio elevator and fell 4 cents lower at an Illinois river terminal while holding steady elsewhere across the central U.S. today.

Soybean sales only reached 15.0 million bushels last week, tumbling 68% below the prior four-week average and landing on the low end of trade estimates, which ranged between 14.7 million and 42.3 million bushels. Cumulative totals for the 2020/21 marketing year are still way ahead of last year’s pace, with 996.7 million bushels.

Soybean export shipments were much more robust, with 91.6 million bushels, but that was still 6% below the prior four-week average. China was by far the No. 1 destination, with 73.9 million bushels.

Brazilian consultancy Céleres lowered its estimates for the country’s 2020/21 soybean production by 3.3% to 4.758 billion bushels, citing dry weather in some key production regions and assuming average yields of 49.5 bushels per acre.

Workers across several grain processing facilities in Argentina initiated another 24-hour strike as they seek bonus payments for working during the coronavirus pandemic. The country’s soymeal and soyoil exports were worth more than $9.9 billion for the first 10 months of the year.

South Korea issued an international tender to purchase 72,000 metric tons of soymeal from optional origins that closes later today. The grain is for shipment between mid-December and late May.

What will it take for soybean prices to move above the $12 benchmark? A combination of several factors will probably need to come into play, according to Naomi Blohm, senior market adviser with Stewart Peterson. Blohm elaborates in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 195,154 contracts, sliding moderately below Wednesday’s final count of 261,726.

Wheat

Wheat prices stumbled after a lackluster round of export data from USDA this morning and reports of more bullish production potential in Canada. March Chicago SRW futures fell 4.5 cents to $5.84, March Kansas City HRW futures dropped 4.25 cents to $5.4950, and March MGEX spring wheat futures lost 3.25 cents to $5.5275.

Wheat export sales dipped 5% below the prior four-week average, with 16.4 million bushels, landing in the middle of trade guesses that ranged between 9.2 million and 25.7 million bushels. Mexico led the way, with 3.3 million bushels. Cumulative totals for the 2020/21 marketing year are fractionally below last year’s pace, with 454.6 million bushels.

Wheat export shipments climbed 40% above the prior four-week average to 16.6 million bushels. The Philippines topped all destinations, with 4.4 million bushels.

Statistics Canada is expecting the country’s all-wheat production to rise 7.7% year-over-year to reach 1.293 billion bushels. Much of that increase could be attributed to a spike in durum wheat production, which is expected to climb 31% above 2019 totals. Canadian barley output is also expected to rise 3.4% this year.

Generally favorable weather in Ukraine suggest the country’s 2020/21 wheat production could 966.4 million bushels, according to the latest analysis from Refinitiv Commodities Research. Satellite imagery suggests “above average” vegetation density, despite some mildly dry weather in recent weeks. Ukraine exports the majority of its wheat crop each year.

Japan purchased 4.7 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed earlier today. Of the total, 69% was sourced from the U.S. The grain is for arrival in Japan by May 5, 2021.

Preliminary volume estimates were for 73,316 CBOT contracts, falling 41% below Wednesday’s final count of 124,617.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 423.25 417.75 422.5 3.25
21-Mar 427.5 422 426.5 2.5
Soybeans        
21-Jan 1170.75 1152 1168.25 13.75
21-Mar 1172.5 1154 1170.25 14
Soymeal                $/ton        
21-Jan 391 384.7 390 3.5
Soyoil                    cents/lb        
21-Jan 37.8 36.88 37.73 0.71
Wheat                    $/bushel        
20-Dec 576 568 571.75 -6.25
21-Mar 591 579.75 584.5 -4.5
KC Wheat        
20-Dec 541.75   545  
21-Mar 556.25 544.75 549.75 -4.25
MPLS Wheat        
20-Dec 513   540.5  
21-Mar 557.5 552.75 553.5 -3.25
Live Cattle             cents/lb        
20-Dec 110.6 108.95 109.4 -1.3
Feeder Cattle         cents/lb        
21-Mar 141.1 138.6 139 -1.975
Lean Hogs             cents/lb        
21-Feb 68.05 66.725 66.925 -0.95
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jan 45.84 44.66 45.73 0.45
Diesel        
21-Jan 1.3984 1.3541 1.3938 0.0276
Unleaded Gasoline   $/gallon        
21-Jan 1.2664 1.2239 1.2649 0.025
Natural Gas        
21-Feb 2.764 2.486 2.54 -0.238
Ethanol Futures        
21-Jan 1.32 1.32 1.32 -0.02
U.S. Dollar Index        
20-Dec 91.095 90.505 90.71 -0.405
Gold                      $/ounce        
21-Jan 1844 1824 1838.9 13.2
Copper        
20-Dec 3.5055 3.458 3.473 -0.002
Fertilizer Swaps     (as of 11/27)  
DAP Tampa-index              264.0 3
DAP-New Orleans              407.9 12
Urea-New Orleans              270.6 8
Urea-Middle East              280.0 15
Urea-Black Sea              247.5 8
UAN (32%) New Orleans              132.3 0
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