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Afternoon Market Recap for December 2, 2021

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Grain prices continue to push higher.

Corn, soybeans and wheat find moderate to major gains Thursday

Grain prices had a couple of rough sessions to start this week, Wednesday’s session finally saw most contracts reverse higher. Thursday provided the opportunity for an encore, featuring plenty of technical buying. Corn prices rose nearly 1%, with soybean prices up more than 1.25%. Wheat prices saw even more upside after the focus returned to tightening global supplies – some contracts rose more than 3%.

Some wetter weather is returning to parts of the Midwest and Plains between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. Some portions of the Mid-South and Great Lakes regions could gather another 0.5” or more during this time. NOAA’s latest 8-to-14-day outlook predicts more wetter-than-normal conditions for the eastern Corn Belt between December 9 and December 15. Nearly all of the U.S. will see seasonally warm conditions during this time.

On Wall St., the Dow jumped 719 points higher in afternoon trading to 34,741, anchored by big gains from the airline and energy sectors. Energy futures moved moderately higher, with crude oil up 2.5% to move back above $67 per barrel this afternoon. Diesel rose 1.75%, with gasoline up around 1.5%. Volatile natural gas prices tumbled another 3% lower. The U.S. Dollar firmed slightly.

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

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Corn

Corn prices trended nearly 1% higher on a round of technical buying largely supported by spillover strength from wheat and outside markets. December futures added 5.25 cents to $5.7725, with March futures up 5.5 cents to $5.77.

Corn basis bids were largely steady across the central U.S. on Thursday but did tip 2 cents lower at an Iowa river terminal today.

Corn exports gathered another 40.2 million bushels in old and new crop sales last week, trending 12% below the prior four-week average. That was near the middle of trade guesses, which ranged between 23.6 million and 52.3 million bushels. Cumulative sales for the 2021/22 marketing year are still a bit behind last year’s pace, reaching 379.8 million bushels.

Corn export shipments inched 1% higher week-over-week and 5% above the prior four-week average, with 36.9 million bushels. Mexico was the No. 1 destination, with 15.1 million bushels.

USDA reported that 1.949 million tons of DDGS were produced in October, which was a year-over-year increase of 6.9%. Another 469.3 million bushels of corn were used to produce ethanol in October, rising 8.1% year-over-year.

There is ample awareness that the acreage battle for 2022 is still fully in motion, points out Naomi Blohm, senior market adviser with Stewart Peterson. “With nine grain and oilseed commodities with tight ending stocks, all commodities need as many acres as they can get to alleviate the tight ending stocks situation,” she says. Will corn acres take a back seat to soybeans, wheat and cotton next year? Blohm offers up some analysis in the latest Ag Marketing IQ blog – click here to learn more.

Argentina’s 2021/22 corn plantings could reach 18.039 million acres, per the latest reporting from the Buenos Aires Grains Exchange, which expects the country to produce 2.165 billion bushels this season. Argentina is the world’s No. 2 corn exporter.

Preliminary volume estimates were for 285,289 contracts, trending moderately above Wednesday’s final count of 244,415.

Soybeans

Soybean prices followed other grains and outside markets higher after a round of technical buying today, capturing double-digit gains in the process. Another solid round of export sales lent additional support. January futures rose 16.5 cents to $12.4475, with march futures up 15.25 cents to $12.5025.

Soybean basis bids were steady to mixed on Thursday, moving as much as 5 cents higher at an Indiana processor while falling as much as 10 cents lower at an Iowa processor today.

Private exporters announced two large soybean sales to USDA on Thursday. The first was for 6.0 million bushels to unknown destinations, and the second was for 4.8 million bushels to China. Both sales are for delivery during the 2021/22 marketing year, which began September 1.

Old crop soybean exports trailed last week’s pace by 32%, falling to 39.1 million bushels, with new crop reductions of 1.8 million bushels, pushing the total down to 37.3 million bushels. Analysts were generally expecting a bigger haul, with trade estimates ranging between 29.4 million and 69.8 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately below last year’s pace, with 774.2 million bushels.

Soybean export shipments bested the prior week’s pace by 3% but slid 14% below the prior four-week average, with 85.5 million bushels. China was by far the No. 1 destination, with 51.8 million bushels.

Are you comfortable with your understanding of the two primary methods of market analysis – fundamental and technical? Consultant Roger Wright walks through some key points of each type of analysis in yesterday’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 177,281 contracts, sinking slightly below Wednesday’s final count of 192,461.

Wheat

Wheat prices jumped considerably higher on a round of technical buying as the focus returned to tightening global supplies and some production challenges abroad as well as the drought-stressed U.S. Plains. December Chicago SRW futures climbed 28 cents to $8.0650, December Kansas City HRW futures rose 25 cents to $8.3925, and December MGEX spring wheat futures added 22.5 cents to $10.5950.

Wheat exports were lackluster, with old crop sales tumbling to a marketing-year low of 2.9 million bushels. New crop sales chipped in another 955,000 bushels, for a total of just under 3.9 million bushels. Trade estimates missed the mark entirely, with a range of 9.2 million to 23.9 million bushels. All-wheat sales for the 2021/22 marketing year remain moderately behind last year’s pace, with 361.0 million bushels.

Wheat export shipments fared better, climbing 66% above the prior four-week average to 13.6 million bushels. The Philippines topped all destinations, with 6.8 million bushels.

The latest updates to the U.S. Drought Monitor show overly dry conditions are trending higher in the High Plains, where 82.7% of the region was affected through November 30, up from 82.0% a week earlier. That’s still better than year-over-year results of 96.8%, however. Click here to see drought’s current footprint in your area.

Preliminary volume estimates were for 107,718 CBOT contracts, which firmed 26% above Wednesday’s final count of 85,465.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn               $/bushel      
21-Dec 583 570 577 5.25
22-Mar 581.5 569.5 576.75 5.5
Soybeans        
22-Jan 1249 1221 1244.25 16.5
22-Mar 1255.25 1228.5 1250 15.25
Soymeal              $/ton        
22-Jan 353.5 348.1 348.8 -0.6
Soyoil              cents/lb        
22-Jan 56.67 54.59 56.34 1.27
Wheat             $/bushel        
21-Dec 809.25 779.5 806.5 28
22-Mar 820.5 789.5 815 25.75
KC Wheat        
21-Dec 841.25 829.5 838.5 25
22-Mar 848.5 820 842.25 23.25
MPLS Wheat        
21-Dec 1059.5 1036.5 1061 22.5
22-Mar 1047.5 1022 1042.25 23
Live Cattle       cents/lb        
21-Dec 138.05 135.975 137.575 1.575
Feeder Cattle   cents/lb        
22-Mar 168.425 166.925 168.35 0.45
Lean Hogs       cents/lb        
22-Feb 82.7 78.95 82.175 2.05
Crude Oil         $/barrel *Energy prices may not represent final settlements      
22-Jan 67.36 62.43 67.12 1.55
Diesel        
22-Jan 2.1334 2.0069 2.1165 0.0394
Unleaded Gasoline $/gallon        
22-Jan 2.005 1.8799 1.9819 0.0308
Natural Gas        
22-Feb 4.256 3.988 4.049 -0.139
Ethanol Futures        
22-Jan     2.137  
U.S. Dollar Index        
21-Dec 96.18 95.825 96.145 0.121
Gold                $/ounce        
22-Jan 1782.5 1761.8 1765 -16.6
Copper        
21-Dec 4.3085 4.2405 4.293 0.0455
Fertilizer Swaps     (as of 11/26)  
DAP Tampa-index              810.0 70
DAP-New Orleans              821.2 17
Urea-New Orleans              890.1 -1
Urea-Middle East              945.0 0
Urea-Black Sea              910.0 0
UAN (32%) New Orleans              617.3 0

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