Afternoon Market Recap for Feb. 24, 2021

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Grains stay green.

Corn, soybean and wheat prices all find solid footing in Wednesday’s session

Grain prices carved out a healthy round of gains Wednesday as they followed a broad range of other commodities higher today. Rains in Brazil are expected to cause further delays to an already slow harvest, which helped soybean prices to rise another 1.25%. Corn followed suit, rising almost 1% higher after a somewhat choppy session. Some wheat contracts firmed by as much as 2%, meantime, with traders still focused on widespread weather challenges both in the U.S. and abroad.

The Mid-South is set to get plenty of rain between Thursday and Sunday, but most of the Midwest and Plains won’t see much more than trace amounts during that time, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally wet weather for the Corn Belt between March 3 and March 9, while drier conditions will persist in the Plains. Warmer-than-normal conditions are expected across the entire central U.S.

On Wall St., the Dow jumped 421 points higher in afternoon trading to 31,958 as investors continue to bet on an economic comeback, although worries of potential interest rate hikes and inflation still lurk in the background. Energy futures notched significant gains today, with crude oil climbing 2.5% higher and moving back above $63 per barrel. Diesel and gasoline were each up around 2% today. The U.S. Dollar softened fractionally.

On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+6,500), soybeans (+13,500), soymeal (+3,500), soyoil (+5,000) and CBOT wheat (+2,000).

NOTE: Farm Futures regularly surveys our audience about a variety of production and management topics. The responses help inform future content – please take a few minutes to participate here.

Corn

Corn prices followed a broad range of other commodities higher, including soybeans, wheat, livestock, energy and stocks. The spillover strength was enough to prompt some technical buying that improved prices by around 1% today. March futures gained 5.25 cents to $5.59, with May futures up 4.25 cents to $5.5675.

Corn basis bids were steady to soft Wednesday, falling 1 to 7 cents lower across a handful of Midwestern locations today.

Ahead of Thursday morning’s weekly export recap from USDA, analysts expect the agency to show corn sales ranging between 21.7 million and 63.0 million bushels for the week ending February 18. Actuals will need to move to the higher end of that range to best the prior week’s tally.

U.S. ethanol production tumbled 28% lower week-over-week to a seasonal low of 658,000 barrels per day for the week ending February 19 after production plants faced logistical problems amid widespread subzero weather last week. Production is likely to rebound back to its prior levels of approximately 935,000 barrels per day now that this one-off problem is in the rearview mirror.

Brazilian ethanol production has historically been produced using sugarcane, but the country’s corn-based ethanol plants are seeing some forward momentum. “They are mainly located in the center west of Brazil where the biggest corn producers are located,” notes Julio Bravo, CEO of AgroBravo. “That was a very good opportunity for our ‘safrinha corn,’ the second crop. Logistically, processing this corn domestically is more profitable than trying to ship it out of the country.” Bravo offers more details about this trend here.

Grain traveling the nation’s railways tallied another 18,860 carloads last week. That leaves year-to-date totals at 177,674 carloads, which is 30% above 2020’s pace so far.

A South Korean corn processing association has purchased 2.4 million bushels of corn, likely sourced from the United States, in a deal that closed earlier today. The grain is for arrival by May 20.

Decision time: Is it time to start working with a marketing adviser, if you don’t already? With higher prices, there’s more at stake this year. Four experts weigh in with their opinions on the matter. Want to post a question for experts to answer? Send queries to mike.wilson@farmprogress.com.

Preliminary volume estimates were for 465,350 contracts, tracking 19% higher than Tuesday’s final count of 391,682.

Soybeans

Soybean prices enjoyed another round of double-digit gains today, closing 1.25% higher on another round of technical buying spurred by news of harvest delays in South America. March futures climbed 18 cents to $14.24, with May futures rising 17.25 cents to $14.2575. Prices have moved higher for four consecutive sessions.

Soybean basis bids were largely steady, save for a few narrowly mixed changes after an Iowa river terminal dropped 2 cents and an Indiana processor firmed 2 cents Wednesday.

Ahead of Thursday morning’s weekly export report from USDA, analysts have some disagreement about where they think soybean sales will land for the week ending February 18, with a wide range of guesses between 7.3 million and 47.8 million bushels.

Analysts also expect USDA to show soymeal sales ranging between 75,000 and 450,000 metric tons last week, plus another 5,000 to 30,000 MT of soyoil sales.

A Reuters poll of 13 trade analysts shows the expectation for Brazil’s 2020/21 soybean harvest to come in around 4.883 billion bushels. If realized, that would move nearly 6.5% above last year’s production and will be the country’s biggest harvest on record.

Feeling some déjà vu? Tom Vilsack returns to his prior role as U.S. Secretary of Agriculture after the Senate easily confirmed his nomination 92-7. “We have a lot of work ahead of us to contain the pandemic, transform America’s food system, create fairer markets for producers, ensure equity and root out systemic barriers, develop new income opportunities with climate smart practices, increase access to healthy and nutritious food, and make historic investments in infrastructure and clean energy in rural America,” he wrote in a statement.

Preliminary volume estimates were for 273,430 contracts, spilling moderately below Tuesday’s final count of 333,624.

Wheat

Wheat prices found solid gains on another round of technical buying today, moving to the highest level in more than a month. Traders remain watchful for signs of quality and yield damage in the U.S. and Black Sea region, which both faced widespread subzero temperatures last week. March Chicago SRW futures gained 11 cents to $6.7675, March Kansas City HRW futures rose 13.25 cents to $6.5425, and March MGEX spring wheat futures added 10 cents to $6.46.

Ahead of the next weekly USDA export report, out tomorrow morning, analysts expect the agency to show wheat sales ranging between 11.0 million and 31.2 million bushels for the week ending February 18.

India could see a record wheat production in 2021/22 that could reach 4.079 billion bushels, with the country’s government reporting that plantings are up 3.1% a year ago to 85.276 million acres. The country has seen some struggles with recent hot, dry weather, however.

Jordan purchased 2.2 million bushels of hard milling wheat from optional origins in a tender that closed earlier today. The grain is for shipment in late October.

Preliminary volume estimates were for 134,849 CBOT contracts, which was a moderate improvement over Tuesday’s final count of 100,564.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 560.75 552 559.25 5.25
21-May 558 551 557 4.25
Soybeans        
21-Mar 1426.5 1406.75 1423.75 18
21-May 1428 1409.5 1425.75 17.25
Soymeal                $/ton        
21-May 434 424.7 427.3 1.6
Soyoil                    cents/lb        
21-May 50.39 48.12 50.03 1.61
Wheat                    $/bushel        
21-Mar 683.5 665 680.25 11
21-May 688.5 668.75 685.5 11.75
KC Wheat        
21-Mar 657 639 656 13.25
21-May 664 645.25 663 13.75
MPLS Wheat        
21-Mar 648 633.75 646.5 10
21-May 658.75 645.75 657.5 8.25
Live Cattle             cents/lb        
21-Feb 116.65 115.625 116.625 1
Feeder Cattle         cents/lb        
21-Apr 144.825 142.225 144.65 2.05
Lean Hogs             cents/lb        
21-May 91.8 89.25 91.775 2.925
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 63.37 60.97 63.17 1.5
Diesel        
21-Mar 1.9105 1.857 1.9062 0.0382
Unleaded Gasoline   $/gallon        
21-Mar 1.9 1.8486 1.8892 0.0306
Natural Gas        
21-Apr 2.868 2.791 2.801 -0.056
Ethanol Futures        
21-Mar     1.729  
U.S. Dollar Index        
21-Mar 90.445 89.96 90.17 0.003
Gold                      $/ounce        
21-Mar 1813 1782.2 1795.2 -9.6
Copper        
21-Feb 4.22 4.22 4.22 0.0325
Fertilizer Swaps     (as of 02/19)  
DAP Tampa-index              530.0 0
DAP-New Orleans              580.4 -13
Urea-New Orleans              375.9 10
Urea-Middle East              385.0 5
Urea-Black Sea              360.0 3
UAN (32%) New Orleans              235.9 4.96
 
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