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Afternoon Market Recap for July 22, 2021

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Grain prices sink lower.

Corn, soybeans and winter wheat all face moderate losses Thursday

 

Grain prices spilled into the red for the most part today, anchored by losses of 2.5% for winter wheat contracts after traders engaged in a round of technical selling and profit-taking. (Prices had risen six consecutive sessions before today.) Soybeans fell 2%, with corn down around 1% after a disappointing round of export sales data from USDA this morning. Spring wheat prices bucked the overall trend, moving around 0.5% higher on lingering worries about crop quality and yield potential.

Most of the Midwest and Plains will at least see some measurable moisture between Friday and Monday, but not many areas are likely to see more than 0.1” during that time, per the latest 72-hour cumulative precipitation map from NOAA. Hot, dry weather remains probable for much of the country between July 29 and August 4, per the agency’s 8-to-14-day outlook.

On Wall St., investors largely shook off bearish jobs data and pushed the Dow 57 points higher in afternoon trading to 34,855. Jobless claims increased to 419,000 this past week, versus analyst expectations of 350,000. Energy futures also continue to move higher as they recover from a sharp selloff on Monday. Crude oil added another 2% to move above $71 per barrel. Diesel was also up 2%, with gasoline rising 2.5%. The U.S. Dollar firmed slightly.

On Wednesday, commodity funds were net buyers of corn (+4,000), soymeal (+3,000) and CBOT wheat (+4,500) but were net sellers of soyoil (-4,000). Funds were roughly even when trading soybean contracts yesterday.


Corn prices started Thursday’s session with moderate losses and were unable to gather any positive momentum today after a lackluster round of export data from USDA, coupled with spillover weakness from other grains. September futures dropped 6.25 cents to $5.6550, with December futures down 6.75 cents to $5.6175.

Corn basis bids firmed 2 to 12 cents higher at three interior river terminals Thursday while holding steady elsewhere across the central U.S. today.

Corn exports faced old-crop net reductions of 3.5 million bushels and new crop net sales of 1.9 million bushels, which left a negative balance of 1.6 million bushels last week. Analysts were expecting to see totals anywhere between zero and 27.6 million bushels. Cumulative totals for the 2020/21 marketing year are still trending more than 900 million bushels above last year’s pace, at 2.392 billion bushels.

Corn export shipments dropped 22% below the prior four-week average, to 39.5 million bushels. China accounted for more than half of that total, with 20.7 million bushels.

Where are grain prices likely to head next? Naomi Blohm, senior market adviser with Stewart Peterson, has her eye on three items in particular that are worth watching, including flood events in China, U.S. weather forecasts and trendspotting from future crop progress reports. Blohm offers additional analysis in today’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 262,200 contracts, tracking slightly higher than Wednesday’s final count of 245,630.


Soybean prices fell 1.6% to 2% lower after traders returned to technical selling today. Weather in the central U.S. remains hot and dry for now, but some rainy relief could be on its way starting in August. Traders were also disappointed by the lackluster round of export sales data out this morning. August futures dropped 23 cents to $14.1625, with September futures down 28.5 cents to $13.6925.

Soybean basis bids were steady to soft across the central U.S. – particularly at Midwestern processors, where three locations dropped 5 to 10 cents lower today.

Soybean exports added 2.3 million bushels in old crop sales plus another 6.5 million bushels in new crop sales, for a total of 8.8 million bushels. That was toward the lower end of trade guesses, which ranged from 1.8 million to 23.9 million bushels. Cumulative totals for the 2020/21 marketing year remain more than 700 million bushels ahead of last year’s pace, climbing to 2.163 billion bushels.

Soybean export shipments slid 17% lower week-over-week and 19% below the prior four-week average, to 6.0 million bushels. Mexico was the No. 1 destination, with 2.2 million bushels.

Trade between China and the U.S. has been booming, jumping to the “briskest pace in years,” according to recent reporting from Bloomberg. Trade has also been hot with other Asian countries such as South Korea and Taiwan in recent months. Click here to learn more.

South Korea has purchased a modest amount of GMO-free soybeans, totaling about 147,000 bushels, in an international tender that closed yesterday. The grain is for arrival between September 10 and October 20.

Preliminary volume estimates were for 196,598 contracts, moving moderately ahead of Wednesday’s final count of 126,292.


Wheat prices were mixed but mostly lower Thursday. Winter wheat contracts suffered losses of more than 2% on a round of profit-taking after moving higher for the previous six sessions. Spring wheat prices stayed in the green, in contrast, amid persistent concerns that this season’s crop has suffered tremendous drought-related quality and yield damages. September Chicago SRW futures fell 18.5 cents to $6.9225, September Kansas City HRW futures dropped 14.75 cents to $6.54, and September MGEX spring wheat futures added 5.25 cents to $9.03.

Wheat exports reached 17.4 million bushels last week – a 44% improvement versus the prior four-week average. That was slightly on the higher end of trade estimates, which ranged between 12.9 million and 22.0 million bushels. All-wheat exports for the 2021/22 marketing year are still trending moderately behind last year’s pace, with 87.6 million bushels.

Wheat export shipments improved 29% week-over-week to 17.3 million bushels. The Philippines topped all destinations, with 4.4 million bushels.

Consultancy Strategie Grains trimmed its estimates for France’s 2021 soft wheat production due to lower-than-expected yields in the country’s northwestern region. Estimates fell by nearly 37 million bushels to 1.360 billion bushels. France is Europe’s No. 1 wheat producer.

USDA raised its estimates for Romanian wheat production, citing better-than-expected rainfall totals, moving it to 349.1 million bushels – a year-over-year increase of 58%, if realized.

Preliminary volume estimates were for 116,649 CBOT contracts, shifting32% above Wednesday’s final count of 88,197.

 



 


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