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Afternoon Market Recap for Jan. 20, 2021

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Soybeans take another spill lower.

Corn and wheat also land in the red Wednesday

Grain prices sputtered for the second consecutive session today as traders remain focused on recent South American rains with the possibility of more yield-replenishing weather later this month. Soybeans took the biggest hit, dropping double digits and finishing the session down 1.25%. Corn prices fell 1%, meantime, with wheat contracts also taking a moderate hit today.

Some additional wet weather is on its way to parts of the Northern Plains and upper Midwest between Thursday and Sunday, but most areas won’t see much more than 0.25”, per NOAA’s latest 72-hour cumulative precipitation map. The agency’s 8-to-14-day outlook predicts widespread seasonally dry weather between January 27 and February 2, with warmer-than-normal conditions throughout the Plains.

On Wall St., the Dow rose 208 points in afternoon trading to 31,138, while the S&P 500 reached a new all-time high. Investors are generally hopeful that the new Biden Administration will help usher in a $1.9 trillion relief package that will aid in U.S. economic recovery. Energy prices were also in the green today, with crude oil up 0.5% this afternoon to stay just above $53 per barrel. Gasoline was also up around 0.5%, with diesel inching fractionally higher. The U.S. Dollar firmed slightly.

On Tuesday, commodity funds were net sellers of all major grain contracts, including corn (-25,000), soybeans (-20,000), soymeal (-5,000), soyoil (-500) and CBOT wheat (-2,500).

NOTE: Due to Monday’s Martin Luther King, Jr. holiday, USDA’s next weekly export sales report, which usually drops on Thursday morning, will be released a day later.

Corn

Corn prices dropped 1% Wednesday on a round of technical selling and profit-taking as yield-replenishing rains have made their way to South America. Spillover weakness from soybeans applied additional headwinds. March futures dropped 4.75 cents to $5.2125, with May futures down 5.25 cents to $5.23.

Corn basis bids were steady to slightly mixed Wednesday, moving as much as 2 cents higher at an Illinois river terminal and falling as much as 3 cents lower at an Iowa processor today.

As earlier feared, the Environmental Protection Agency granted three small refinery exemptions, or waivers, for 2019 Renewable Fuel Standard blending and one SRE for 2018. These waivers represent the demand equivalent of 260 million gallons of ethanol. Farm Futures policy editor Jacqui Fatka has the details – click here to learn more.

More than 70% of Brazil’s safrinha corn crop will be planted outside of the ideal window, according to Tarso Veloso, general manager with AgResource. That’s due to delays and late plantings for the country’s earlier crops, he says. Large portions of the country saw rainfall that was only at 25% to 75% versus normal levels between September and December.

Meanwhile, Brazilian consultancy Datagro has lowered its forecast for 2020/21 corn production by 3.6% to 4.328 billion bushels. The group also lowered its estimates for this season’s corn footprint to 48.482 million acres.

Worried that rising grain prices will lead to rising input costs? Your fears aren’t unfounded, according to grain market analyst Bryce Knorr. Fuel and fertilizer costs are already on the rise. Knorr walks through some specifics in our Ag Marketing IQ blog – click here to learn more.

Grain traveling the nation’s railways saw another 27,613 carloads of grain last week. That puts cumulative totals for 2021 at 55,263 carloads – off to a hot start after moving 47% above last year’s pace so far.

Taiwan purchased 2.6 million bushels of animal feed corn sourced from the U.S. in an international tender that closed earlier today. The grain is for shipment between March and April.

Preliminary volume estimates were for 396,148 contracts, trending 7.5% higher than Tuesday’s final count of 368,353.

Soybeans

Soybean prices suffered another major setback Wednesday, falling another 1.25% on a round of technical selling as traders remain laser-focused on South American weather as its 2020/21 season winds down. Overnight prices started even deeper in the hole but improved a little as the session wore on. March futures closed own 17.5 cents to $13.6825, while May futures dropped 17.25 cents to $13.66.

Soybean basis bids were steady to soft across the central U.S. after dropping 5 cents at an Illinois river terminal and 3 cents at an Ohio elevator today.

Brazilian consultancy Datagro is still predicting a record-breaking soybean this season, with a new projection of 4.983 billion bushels, inching 0.5% above the group’s previous estimate. That’s across a footprint of 95.753 million acres.

China purchased significantly more soybeans from the U.S. last year, jumping from 622.4 million bushels in 2019 to 951.3 million bushels in 2020, which is a year-over-year increase of nearly 53%. Imports are expected to move higher again this year – a good thing, considering it still isn’t on target with its phase-one trade promises.

Preliminary volume estimates were for 309,580 contracts, tracking moderately above Tuesday’s final count of 237,779.

Wheat

Wheat prices followed corn and soybeans lower Wednesday on a round of technical selling, with some contracts closing more than 1% down today. Some forecasted rains in the Plains, which could help winter wheat conditions, applied additional headwinds. March Chicago SRW futures dropped 5.25 cents to $6.67, March Kansas City HRW futures fell 7.5 cents to $6.3650, and March MGEX spring wheat futures lost 9 cents to $6.3450.

Turkey issued an international tender to purchase 14.7 million bushels of red and white milling wheat from optional origins that closes on Friday. “[Including white wheat] could allow wheat from more origins to be offered in the tender at a time when wheat from Turkey’s big supplier Russia is more expensive and faces an upcoming export tax,” according to one trader.

Jordan purchased 4.4 million bushels of hard milling wheat from optional origins in a tender that closed earlier today. The grain is for shipment in August.

The United Nations purchased 4.4 million bushels of wheat, sourced from the Black Sea region, as humanitarian aid for Ethiopia, which continues to struggle with severe drought. The grain is for shipment between February and March.

Japan is planning another simultaneous buy-and-sell auction on January 27 to secure 2.9 million bushels of feed wheat and 4.6 million bushels of feed barley for arrival by March 18.

Algeria purchased an estimated 4.4 million to 11.0 million bushels from optional origins in an international tender that closed earlier today. The grain is for shipment. Additional details about specific volumes are expected to be available soon.

Preliminary volume estimates were for 147,677 CBOT contracts, climbing above Tuesday’s final count of 126,180.

 

Closing Prices for Key Commodities 

  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 526.5 512.75 522 -4.75
21-May 528 515 524 -5.25
Soybeans        
21-Mar 1384.5 1352 1369.5 -17.5
21-May 1382.25 1348.5 1367.25 -17.25
Soymeal                $/ton        
21-May 447.1 435.2 438.4 -8.7
Soyoil                    cents/lb        
21-May 41.99 40.53 41.92 0.69
Wheat                    $/bushel        
21-Mar 676 656.5 667.75 -5.25
21-May 677 657.75 668 -5.5
KC Wheat        
21-Mar 647.75 633.25 637 -7.5
21-May 650.5 636.75 640.25 -7.5
MPLS Wheat        
21-Mar 646.75 631.75 637.5 -9
21-May 655 641.25 646 -8.5
Live Cattle             cents/lb        
21-Feb 114.225 113.05 113.4 0.075
Feeder Cattle         cents/lb        
21-Mar 138.475 136.825 137.075 0.275
Lean Hogs             cents/lb        
21-Apr 73.25 70.65 73.075 1.65
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Feb 53.79 53.05 53.28 0.3
Diesel        
21-Feb 1.6141 1.5959 1.5964 -0.0023
Unleaded Gasoline   $/gallon        
21-Feb 1.5635 1.5381 1.5391 0.001
Natural Gas        
21-Mar 2.554 2.459 2.54 0.011
Ethanol Futures        
21-Mar     1.605 -0.035
U.S. Dollar Index        
21-Mar 90.69 90.25 90.47 -0.006
Gold                      $/ounce        
21-Feb 1870.4 1831.1 1866.6 27.1
Copper        
21-Jan 3.6545 3.639 3.6545 0.0185
Fertilizer Swaps     (as of 01/15)  
DAP Tampa-index              405.0 15
DAP-New Orleans              444.8 12
Urea-New Orleans              330.1 34
Urea-Middle East              315.0 19
Urea-Black Sea              287.5 28
UAN (32%) New Orleans              162.6 16.53
 
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