Afternoon Market Recap for Feb. 25, 2021

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Poor exports put rally on pause.

A round of profit-taking pushed corn, soybeans and wheat lower Thursday

Grain prices slid back into the red Thursday on a round of technical selling and profit-taking after traders digested a dismal round of export sales data from USDA this morning. Wheat contracts suffered the steepest cuts, with some contracts falling nearly 2% lower today. Soybean prices saw double-digit losses that erased nearly all of the gains captured on Wednesday. Corn prices dropped sharply this morning but managed to recover some of those losses as the session wore on, closing around 1% lower.

Not a lot of additional rain or snow is expected between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA, but most of the eastern Corn Belt will see at least some measurable moisture during this time. NOAA’s new 8-to-14-day outlook, meantime, expects a return to seasonally wet weather for the Midwest between March 4 and March 10, with much of the country enjoying warmer-than-normal conditions during this time.

On Wall St., the Dow crumbled 378 points lower in afternoon trading to 31,583 amid rising bond yields, which many investors see as a sign of future rising interest rates and inflation. Energy futures were lightly mixed, with crude oil firming nearly 0.5% to stay above $63 per barrel, while gasoline and diesel slid about 0.3% lower. The U.S. Dollar softened slightly.

On Wednesday, commodity funds were net buyers of all major grain contracts, including corn (+12,500), soybeans (+10,000), soymeal (+1,000), soyoil (+9,000) and CBOT wheat (+9,500).

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 faced steep cuts this morning after USDA reported a marketing-year low for old crop sales but recovered some of those losses. Prices ultimately dropped about 1% today, however. March futures faded 5.25 cents to $5.54, with May futures down 8 cents to $5.49.

Corn basis bids held steady across most Midwestern locations Thursday but did tilt 3 cents lower at an Ohio elevator today.Corn exports saw 17.8 million bushels in old crop sales – a marketing year low – plus another 5.7 million bushels in new crop sales for a total tally of 23.5 million bushels. That was on the very low end of trade estimates, which ranged between 21.7 million and 63.0 million bushels. Cumulative totals for the 2020/21 marketing year remain well above last year’s pace, with 951.1 million bushels.

Corn export shipments were better but still slid 11% below the prior four-week average to 46.9 million bushels. Mexico was the No. 1 destination, with 12.6 million bushels.

Newly confirmed Secretary of Agriculture, Tom Vilsack, told reporters today that USDA’s priorities in the near term will focus on coronavirus aid and expanding U.S. export markets beyond China.

The International Grains Council moved its projections for 2020/21 global corn production fractionally higher, to 1.134 billion metric tons.

The European Commission reduced its estimates for 2020/21 EU corn imports by almost 79 million bushels, for a total of 649.6 million bushels. Ending stocks are still expected to rise to 751.9 million bushels, due to an increase in “usable production” and a reduction in animal feed use.

Thanks to generally favorable weather, South African corn farmers are expecting a 4% larger crop for the 2020/21 season. The country’s Crop Estimates Committee reported today that total production could reach 623.9 million bushels. A poll of five traders and analysts showed even bigger expectations for this year’s crop, with an average trade guess of 664.2 million bushels.

China’s ministry of agriculture reported today that the country plans to increase its corn footprint by more than 1.6 million acres this year in an attempt to capture more domestic supplies amid rising prices.

Preliminary volume estimates were for 520,340 contracts, moving another 13% above Wednesday’s final count of 458,319.

Soybeans

Soybean prices carved out solid overnight gains heading into Thursday’s session, but a bad round of export sales data from USDA this morning spurred a round of technical selling and profit-taking today, leaving prices down double digits by the close. Spillover weakness from a broad range of other commodities created additional headwinds. March futures tumbled 16.75 cents to $14.07, with May futures losing 17.5 cents to $14.0825.

Soybean basis bids were steady to slightly firm across the central U.S. Thursday after rising 1 to 2 cents higher at three Midwestern locations today.

Old crop soybean sales tumbled 72% below the prior four-week average, to 6.2 million bushels. New crop sales chipped in another 2.6 million bushels, for a total of 8.8 million bushels. That was on the lower end of trade estimates, which had cast a wide range of 7.3 million to 47.8 million bushels. Cumulative totals for the 2020/21 marketing year are still nearly doubling last year’s pace, with 1.898 billion bushels.

Soybean export shipments inched 5% higher week-over-week but were still 42% below the prior four-week average, with 38.7 million bushels. China was the No. 1 destination, with 8.2 million bushels.

The International Grains Council slightly increased its forecast for 2020/21 global soybean production, now at 13.228 billion bushels.

Preliminary volume estimates were for 338,997 contracts, firming moderately above Wednesday’s final count of 270,487.

Wheat

Wheat prices followed corn and soybeans lower after a round of technical selling led to most contracts down by double digits today. The primary culprit was a bearish round of export data from USDA, which revealed wheat sales last week fell to the lowest levels in more than a year. March Chicago SRW futures fell 10 cents to $6.7025, March Kansas City HRW futures lost 12.5 cents to $6.4350, and March MGEX spring wheat futures dropped 5.25 cents to $6.4125.

Old crop wheat export sales stumbled to a marketing-year low, with 6.2 million bushels. New crop sales only added another 543,000 bushels, for a total of around 6.7 million bushels. That tepid tally was below all trade guesses, which ranged between 11.0 million and 31.2 million bushels. Cumulative totals for the 2020/21 marketing year are drifting further below last year’s pace, with 632.7 million bushels.

Wheat export shipments were more robust, with 14.4 million bushels, but that was still 14% worse than the prior four-week average. China led all destinations, with 2.6 million bushels.

The International Grains Council has upped its estimates for global wheat production in 2020/21, bringing it to 28.403 billion bushels. The increase is based on better production potential in Australia, Kazakhstan and Russia. Australia, in particular, is expecting a possible record-breaking harvest this season.

Kazakhstan’s agriculture ministry reports that the country’s 2020 wheat harvest reached 523.8 million bushels, which was a year-over-year improvement of 24.5%. The country’s total grain production moved 15% higher than 2019.

The European Commission increased its forecast for the EU’s 2020/21 wheat exports by 3.8% from January, moving the total to 992 million bushels. That’s still a steep decline from the prior year’s total of 1.356 billion bushels, however.

Taiwan issued an international tender to purchase 3.7 million bushels of grade 1 milling wheat from the United States that closes March 4. The grain is for shipment between late April and late May.

Japan purchased 2.1 million bushels of food-quality wheat from Australia in a regular tender that closed earlier today. The grain is for shipment in May.

Jordan issued a new tender to purchase 4.4 million bushels of milling wheat from optional origins that closes March 3. The grain is for shipment in October and November.

The Philippines declined all offers in its tender to purchase 5.3 million bushels of milling wheat that closed yesterday. Importers also passed on all offers in a similar tender issued last week.

Preliminary volume estimates were for 120,458 CBOT contracts, sliding slightly below Wednesday’s final count of 134,623.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 560.5 542.5 554.75 -5.25
21-May 558 541 549.75 -8
Soybeans        
21-Mar 1443 1391.75 1406 -16.75
21-May 1445.75 1393.5 1407.5 -17.5
Soymeal                $/ton        
21-May 431.5 418.7 423 -5.1
Soyoil                    cents/lb        
21-May 50.95 49.07 49.67 -0.35
Wheat                    $/bushel        
21-Mar 680.5 658.75 671.75 -10
21-May 686 666.25 675.75 -10
KC Wheat        
21-Mar 656 637.25 644.25 -12.5
21-May 662 643.25 652.5 -11
MPLS Wheat        
21-Mar 648 634.75 641.5 -5.25
21-May 656.75 644.75 650.5 -6.5
Live Cattle             cents/lb        
21-Feb 117.325 116.25 116.975 0.4
Feeder Cattle         cents/lb        
21-Apr 145.4 144.2 145.125 0.375
Lean Hogs             cents/lb        
21-May 92.025 91 91.25 -0.3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 63.81 62.65 63.41 0.19
Diesel        
21-Mar 1.9193 1.8885 1.9017 -0.0066
Unleaded Gasoline   $/gallon        
21-Mar 1.904 1.8687 1.89 -0.0056
Natural Gas        
21-Apr 2.879 2.795 2.797 -0.025
Ethanol Futures        
21-Apr     1.729  
U.S. Dollar Index        
21-Mar 90.265 89.675 90.13 -0.04
Gold                      $/ounce        
21-Mar 1805 1763.9 1769.7 -26.9
Copper        
21-Feb 4.363 4.233 4.249 -0.0455
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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