Afternoon Market Recap for July 23, 2021

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Better weather on the way?

Improved mid-range forecasts push corn and soybeans lower Friday
 

The prospect for cooler weather in August with more chances at Midwestern rains created an environment for technical selling again today, which pushed all prices moderately lower. Corn dropped more than 3%, with most wheat contracts losing 2% and soybeans down nearly 1.25% by the close.

A fair portion of the Midwest and Plains could gather another 0.25” or more additional moisture between Saturday and Tuesday, per NOAA’s latest 72-hour cumulative precipitation map. The agency’s 8-to-14-day outlook predicts near-normal precipitation for the eastern Corn Belt between July 30 and August 5, with seasonally dry conditions more prevalent farther west. Warmer-than-normal temperatures are expected to stay next week across most of the U.S. 

On Wall St., the Dow moved 200 points higher in afternoon trading to 35,023, anchored by strong performances in the tech sector. Energy prices saw modest gains today, with crude oil up 0.2% to stay just above $72 per barrel. Diesel captured fractional gains this afternoon, while gasoline rose more than 0.5%. The U.S. Dollar firmed slightly.

On Thursday, commodity funds were net sellers of all major grain contracts, including corn (-6,500), soybeans (-10,500), soymeal (-5,000), soyoil (-2,000) and CBOT wheat (-8,500).


Corn prices slid 3% lower after a round of weather-inspired technical selling on Friday. Traders expect to see cooler, wetter weather develop as July rolls into August, which would be a boon for both quality and yield. The recent slowdown in export sales is also creating additional headwinds right now. September futures dropped 17.5 cents to $5.47, with December futures down 18.25 cents to $5.43.

Corn basis bids were mixed at two Midwestern ethanol plants and firmed 4 to 10 cents higher at two interior river terminals while holding steady elsewhere across the central U.S. today.

China’s state stockpiler, Sinograin, only sold 3.5% of the 8.9 million bushels of corn it offered on auction earlier today. Sinograin has offered a flurry of similar auction since mid-June but sales have severely flagged this month.

Ukrainian corn exports have reached 32.4 million bushels since the beginning of July. Total grain exports have jumped 49% higher year-over-year so far in the young 2021/22 marketing season.

Worried about the recent downward trend of grain prices? And if you didn’t sell the highs earlier this year, what’s the next best move? “If you are asking yourself this question, it might be a good time to take a break from watching every weather model run and remind yourself where we are and where prices have come from,” advises Jim McCormick, hedging strategist with AgMarket.net. McCormick elaborates in today’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 202,891 contracts, falling moderately short of Thursday’s final count of 262,186.


Soybean prices waded through a choppy session Friday, following corn lower on a round of technical selling, and dropping more than 1% by the close. A large sale to Mexico reported this morning helped limit losses somewhat. August futures fell 16.75 cents to $13.9950, with September futures down 15.5 cents to $13.5350.

Soybean basis bids sank 5 to 10 cents lower across five Midwestern processors on Friday while firming 5 cents higher at an Illinois river terminal. Other locations across the central U.S. held steady today.

Private exporters reported to USDA the sale of 3.7 million bushels of soybeans for delivery to Mexico during the 2021/22 marketing year, which begins September 1.

Due to a drop in hog profitability and rising wheat feed use, Chinese demand for soybean imports is expected to cool off for the rest of 2021. On a more bullish note, Chinese soybean imports reached a record 1.799 billion bushels during the first half of the year.

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Preliminary volume estimates were for 120,981 contracts, spilling moderately below Thursday’s final count of 196,573.


Wheat prices faded 2% lower on a round of technical selling largely spurred by spillover weakness from corn and soybeans. Prices still have plenty of longer-term appeal as North American production continues to suffer through a lot of hot, dry weather, and as domestic supplies continue to shift lower. Today, September Chicago SRW futures fell 13.25 cents to $6.79, September Kansas City HRW futures dropped 13.75 cents to $6.40, and September MGEX spring wheat futures lost 16.25 cents to $8.8775.

Ukraine’s 2021 wheat harvest is now 30% complete, according to the country’s agriculture ministry, with farmers seeing average yields of 63.6 bushels per acre so far. Ukraine is one of the world’s top wheat exporters, and its total grain harvest is expected to improve 17% from a year ago after seeing mostly favorable weather this growing season. Total wheat exports could top 760 million bushels this year.

French farm office FranceAgriMer trimmed the country’s soft wheat quality by another point, with 75% of the crop rated in good-to-excellent condition through July 19. That’s still well above year-over-year ratings of 57%. Harvest is off to a sluggish pace so far for Europe’s No. 1 wheat producer, at 14% completion versus 67% the same time a year ago.

If it has been a few days since you’ve been to www. FarmFutures.com, our weekly feature “7 ag stories you may have missed” is a quick, easy way to catch up on some top industry headlines. The latest batch of content includes an update on drought and western wildfires, Chinese agricultural investments in the U.S. and more. Click here to get started.

Preliminary volume estimates were for 60,922 CBOT contracts, falling well below Thursday’s final count of 116,648.

 



 


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