Afternoon Market Recap for June 16, 2021

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Soybean prices continue to erode

Most wheat contracts stay in the green, while corn contracts show mixed results

Grain prices were mixed but mostly higher Wednesday. Spring wheat contracts were the session’s clear winner, firming as much as 1.7% by the close today after a round of technical buying. Winter wheat contracts were more complicated, finishing the session narrowly mixed. Corn contracts were also mixed, with July futures firming 0.5% while September contracts slumped 0.75% lower. Soybean prices saw the most downside, suffering double-digit losses and closing more than 1.5% lower.

Wetter weather should emerge throughout the eastern Corn Belt between today and Saturday, with some areas gathering another 1” or more during this time, while the Northern and Central Plains will barely see any measurable moisture into the weekend, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts cooler-than-normal temperatures will reemerge in the upper Midwest and Great Lakes region from June 23 to June 29, with seasonally wet weather likely for most of the Midwest as the month wraps up.

On Wall St., the Dow dropped 235 points in afternoon trading to 34,064 after the Federal Reserve raised its inflation expectations and indicated it could raise interest rates as soon as 2023. Energy prices saw mild to moderate cuts this afternoon. Crude oil slipped 0.2% lower to just below $72 per barrel. Gasoline was down more than 0.75% this afternoon, while diesel dropped 0.5%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net sellers of all major grain contracts, including corn (-4,000), soybeans (-8,000), soymeal (-2,000), soyoil (-3,500) and CBOT wheat (-8,000).

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Corn prices were narrowly mixed as traders assessed weather forecasts and export trends. As a result, July futures firmed 3.25 cents to $6.7075, while September futures faded 4.5 cents to $5.8725.

Corn basis bids were steady to weak Wednesday after dropping 2 cents at two interior river terminals and sliding a penny lower at an Ohio elevator while holding steady elsewhere across the central U.S. today.

This morning, private exporters announced to USDA the sale of 6.0 million bushels of corn for delivery to unknown destinations during the 2021/22 marketing year, which begins September 1.

Weekly ethanol production slid 4% for the week ending June 11, dropping to a daily average of 1.025 million barrels, per the latest data from the U.S. Energy Information Administration, out earlier today. Stocks were up 3% to reach a 10-week high of 865.2 million gallons.

Also today, the U.S. EPA reported that 1.26 billion ethanol blending credits in May, up from April’s total of 1.14 billion. The U.S. also generated 396 million biodiesel blending credits last month, versus 386 million in April.

Click here to learn more about current and future ethanol production trends – including the potential disruption by electric vehicles – from Farm Futures policy editor Jacqui Fatka, reporting live from the 2021 Farm Futures Business Summit in Coralville, Iowa.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show total corn sales ranging between zero and 35.4 million bushels for the week ending June 10. Volume is slowly shifting away from old crop sales and toward new crop sales as the 2020/21 marketing year begins to wind down.

South Korea purchased 2.4 million bushels of corn, likely sourced from South America, in a private deal that closed yesterday. The grain is for arrival by the end of September.

Preliminary volume estimates were for 359,969 contracts, slipping slightly below Tuesday’s final count of 384,934.

Soybean prices fell in tandem with crumbling soyoil contracts (which dropped more than 5% today). An uptick in Brazilian exports created pressure for additional technical selling today. July futures dropped 23.25 cents to $14.4250, with August futures losing 29.75 cents to $13.9625.

Soybean basis bids boosted 10 cents higher at a Nebraska processor while holding steady across other Midwestern locations on Wednesday.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect to see soybean sales ranging between zero and 18.4 million bushels for the week ending June 10. Analysts also think USDA will show soymeal sales ranging between 100,000 and 325,000 metric tons last week, plus as much as 25,000 MT in soyoil sales.

Brazil’s Anec estimates that the country’s June soybean exports will reach 422.6 million bushels, which is 4.5% above the group’s projection a week ago. Anec also estimates that Brazilian soymeal exports will reach 2.13 million metric tons this month.

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.

Preliminary volume estimates were for 131,050 contracts, falling well short of Tuesday’s final count of 228,167.

Wheat prices were mixed but mostly higher after an uneven round of technical maneuvering today. MGEX spring wheat contracts turned in the strongest performance, with September futures rising 11 cents to $7.6625. September Chicago SRW futures also found small gains, rising 1.5 cents to $6.6750. September Kansas City HRW futures bucked the trend, sliding a penny lower to $6.2025.

Prior to Thursday morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 18.4 million bushels for the week ending June 10.

According to a Reuters poll of 21 analysts, wheat exports from a trio of Black Sea regional countries – Russia, Ukraine and Kazakhstan – should increase by 5% from a year ago to 2.425 billion bushels during the 2021/22 marketing year, which begins July 1.

Iran issued an international tender to purchase 2.2 million bushels of milling wheat, with offers due by today. The grain is for shipment in July and August.

Preliminary volume estimates were for 109,570 CBOT contracts, drifting moderately below Tuesday’s final count of 143,037.

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