Afternoon Market Recap for June 11, 2021

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Biofuels drama jostles grain markets

Corn, soybeans and wheat all spill into the red Friday

The U.S. EPA is looking into ways it can provide relief to oil refiners who say they are under strain from current biofuel blending mandates. RIN credits are currently trading at all-time highs. Fears that these mandates may be relaxed jostled grain prices Friday – particularly soyoil futures, which saw a limit-down drop. Soybean prices also eroded 2% lower, as did nearby corn contracts. Wheat losses were variable, ranging between 0.4% to 1.9% after a choppy session today.

Drought-stressed areas of the Dakotas and western Iowa could continue to see some rainy relief between today and Monday, with the latest 72-hour cumulative precipitation map from NOAA predicting as much as 1” in some areas over the next three days. The agency’s 8-to-14-day outlook expects a return to seasonally dry weather for the Midwest and Plains between June 18 and June 24, with hotter-than-normal temperatures also in the picture.

On Wall St., the Dow slid 36 points lower in afternoon trading to 34,429. Investors remain wary that inflation is moving at its swiftest pace since 2008. So-called “meme stocks” recovered somewhat after suffering heavy losses yesterday. Energy prices were mixed. Crude oil moved 1.25% higher on demand optimism, rising above $71 per bushel. Gasoline and diesel each fell around 1.25% lower, in contrast. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net buyers of corn (+10,000) and CBOT wheat (+500) contracts but were net sellers of soybeans (-6,500), soymeal (-4,000) and soyoil (-2,000).

At next week’s Farm Futures Business Summit, you’ll learn how traders manage risk through technical analysis, one of many learning sessions designed to help you build a smarter farm operation. We’re back live June 16-17 in Coralville, Iowa – click here to learn more about the event and how to register.

Corn prices faded around 2% lower on worries over possible changes to the EPA’s biofuels mandate, which kicked off a round of technical selling and an overall choppy session today. July futures fell 14 cents to $6.85, with September futures down 8.5 cents to $6.2975.

Corn basis bids dropped 4 cents at an Iowa processor Friday but held steady elsewhere across the central U.S. today.

IHS Markit Agribusiness lowered its forecast for 2021 U.S. corn plantings, moving from a May estimate of 96.849 million acres down to 96.539 million acres. That is still significantly higher than USDA’s March planting intentions report, which predicted 91.144 million acres. The agency will update this number on June 30.

Yesterday, NOAA issued a report that expresses concerns over “severe drought expansion and heat” across the upper Midwest. Levels of D2 (severe drought) conditions are expanding across areas of Michigan, Wisconsin, northern Illinois, Iowa and Minnesota. “NOAA’s short-term outlook for June 18-24 calls for a continuation of hot and dry conditions across the Midwest, which will continue to dry soils and make drought issues persist or potentially worsen across the Upper Midwest,” according to a statement from the agency.

French farm office FranceAgriMer reports that 91% of the country’s corn crop is rated in good-to-excellent condition through June 7, unchanged from a week ago.

If you missed yesterday’s big WASDE report from USDA, which offered a bevy of fresh supply and demand data, click here for our exclusive coverage and analysis on what happened.

Preliminary volume estimates were for 510,541 contracts, sliding moderately below Thursday’s final count of 567,470.

Soybean prices stumbled through a choppy session and closed with significant losses after a round of technical selling Friday. July futures tumbled 35.75 cents to $15.0825, with August futures down 27.25 cents to $14.8275.

Soybean basis bids tumbled as much as 27 cents lower at an Ohio river terminal while softening 2 to 5 cents lower at three other Midwestern facilities Friday.

IHS Markit Agribusiness increased its estimates for 2021 U.S. soybean acres from 88.485 million acres in May up to 89.065 million acres. That’s well above USDA’s March estimate of 87.6 million acres – that number will be updated June 30.

Is it worth taking a closer look to compare current soybean prices with the bull markets of 2012 and 2008? Naomi Blohm, senior market adviser with Stewart Peterson, dug into the data in the latest Ag Marketing IQ blog – click here to learn more.

How are your crops doing so far this season? Click here to take our ongoing farmer survey on crop progress, which populates our weekly “Feedback From The Field” stories. This Google Map, updated daily, shows all past responses for our readers.

And if you haven’t been to in a few days, our Friday feature, “7 ag stories you may have missed this week,” is a good way to quickly catch up. The latest batch of content includes a possible GMO ban in Mexico, an update from Texas on the battle against feral hogs, possible updates to the contentious Waters of the U.S. rule from EPA, and more. Click here to get started.

Preliminary volume estimates were for 313,673 contracts, moving slightly ahead of Thursday’s final count of 302,247.

Wheat prices suffered moderate to major losses Friday, with rains in the Plains in the short-term forecasts triggering some technical selling. September Chicago SRW futures fell 4.5 cents to $6.8525, September Kansas City HRW futures were also down 4.5 cents to $6.44, and September MGEX spring wheat futures eroded 16.75 cents to $7.65.

Following IKAR’s lead earlier this week, Russian consultancy Sovecon raised its forecasts for the country’s 2021 wheat production by 1.9% to reach 3.028 billion bushels, based largely on improved crop quality in the country’s southern production regions. Russia is the world’s No. 1 wheat exporter.

In France, soft wheat ratings improved a point to reach 81% rated in good-to-excellent condition, according to farm office FranceAgriMer. It’s also a marked improvement versus the same time a year ago, when just 56% of the country’s soft wheat crop was rated in good-to-excellent condition.

A South Korean feedmill group has purchased 2.4 million bushels of animal feed wheat from optional origins in a tender that closed earlier today. The grain is for shipment between July and August.

Preliminary volume estimates were for 142,588 CBOT contracts, falling moderately below Thursday’s final count of 199,061.

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