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Afternoon Market Recap for June 18, 2021

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Bargain buyers enter the fray.

Corn, soybeans and wheat move higher after suffering major setback Thursday

After facing steep cuts Thursday, bargain buyers returned to the grain markets today, sparking a round of technical buying that lifted prices significantly by the close. Corn and soybean futures each rose about 5% higher, with winter wheat contracts up nearly 1.5% and spring wheat contracts gaining more than 1% in today’s session. Yield friendly weather forecasts for the rest of June may signal additional volatile price shifts over the next two weeks, however.

Rainy weather is returning to the Corn Belt starting this weekend, with large portions of the Midwest and Plains set to receive another 1” or more between Saturday and Tuesday, according to the latest 72-hour cumulative precipitation map from NOAA. Seasonally cool, wet weather is likely for most of the Midwest and Plains between June 25 and July 1, per the agency’s 8-to-14-day outlook.

On Wall St., the Dow dropped another 411 points in afternoon trading to 33,412, likely closing out the worst week since January. Investors remain skittish about inflation and the possibility of interest rate hikes. Energy prices improved, with crude oil rising 0.6% to stay above $71 per barrel. Gasoline and diesel each notched gains of around 1.25%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were significant net sellers of all major grain contracts, including corn (-30,000), soybeans (-30,000), soymeal (-12,000), soyoil (-15,000) and CBOT wheat (-15,000).

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Corn

Corn prices moved significantly higher on a round of bargain buying Friday, recouping most of Thursday’s steep losses after a broad commodity selloff yesterday. July futures rose 24.75 cents to $6.5775, with September futures climbing 30.5 cents to $5.79.

Corn basis bids were mixed at two interior river terminals and slumped 5 cents lower at an Ohio elevator while holding steady elsewhere across the central U.S. today.

Ukraine’s 2020/21 corn exports have reached 877.9 million bushels so far, according to the latest data from the country’s agriculture ministry. Total grain exports are down more than 22% year-over-year.

A South Korean feedmill group has purchased 5.4 million bushels of animal feed corn, likely from South America, in a deal that closed earlier today. The grain is for arrival in early October.

China’s Sinograin auctioned off 1.5 million bushels of corn it had previously purchased from Ukraine. This is the second sale the state stockpiler has initiated so far this month in an attempt to quell rising domestic grain prices.

Farm office FranceAgriMer estimates the country’s corn conditions held steady this past week, despite plenty of hot weather, with 91% rated in good-to-excellent condition through June 14.

Chinese corn imports in May surged 395% year-over-year to 124.4 million bushels. Year-to-date corn imports are up 323%, with 461.8 million bushels. Chinese imports of sorghum, pork and sugar are also significantly higher than a year ago.

Preliminary volume estimates were for 475,354 contracts, drifting slightly below Thursday’s final count of 487,534.

Soybeans

Soybean prices also rebounded significantly Friday but were unable to recapture all of Thursday’s losses, despite rising 5% higher on a round of technical buying today. July futures climbed 67.5 cents to $13.9725, with August futures up 62.5 cents to $13.5750.

Soybean basis bids were steady to mixed Friday, moving as much as 10 cents higher at an Indiana processor and as much as 20 cents lower at an Ohio river terminal today.

U.S. traders are reporting that China purchased at least eight cargo loads of U.S. soybeans totaling approximately 17.6 million bushels. The grain is for shipment out of U.S. Pacific Northwest ports primarily in October, and the sales came soon after prices dropped to the lowest levels since March earlier this week, according to those familiar with the deals.

China plans to subsidize its farmers to the tune of $3.1 billion this year to offset rising fuel and fertilizer cost, according to the country’s cabinet, which stated: “Subsidies should be paid out as soon as possible, so as not to miss the farming season.”

A new resolution from the European Union will suspend tariffs that had been levied on a variety of U.S. goods, including agricultural products. “This deal not only resolves a long running dispute, but also benefits American farmers, ranchers and other food and agriculture industry stakeholders who were harmed by the retaliatory tariffs from this dispute, at a time in which they are working hard to recover and rebuild from the COVID-19 pandemic,” according to House Agriculture Committee Chairman David Scott. Click here to learn more.

Preliminary volume estimates were for 290,905 contracts, falling moderately below Thursday’s final count of 353,818.

Wheat

Wheat prices followed other grains higher today on a round of bargain buying that lifted some contracts more than 3.5% by the close. September Chicago SRW futures climbed 21.5 cents to $6.6450, September Kansas City HRW futures rose 20 cents to $6.1425, and September MGEX spring wheat futures picked up 6.5 cents to $7.6275.

Ukraine’s 2020/21 wheat exports have reached 598.9 million bushels, according to the country’s agriculture ministry. Ukraine has also exported another 190.6 million bushels of barely so far this marketing year.

Chinese wheat imports in May dipped 3% year-over-year to 29 million bushels. However, year-to-date wheat imports have jumped 89% over last year’s pace, with 169.4 million bushels.

In France 81% of the country’s soft wheat crop is in good-to-excellent condition through June 14 – unchanged from a week ago, according to farm office FranceAgriMer. Barley conditions are also stable, with 86% of the crop rated good-to-excellent.

Iran has purchased 7.2 million bushels of milling wheat in a tender that closed on Wednesday. The grain will likely be sourced from Germany, Russia or the Baltic States, and is for shipment in July and August.

The Philippines purchased 5.5 million bushels of wheat in a tender that closed earlier this week. The grain is likely sourced from Australia and is for shipment in July and August.

Preliminary volume estimates were for 131,350 CBOT contracts, sliding moderately below Thursday’s final count of 164,290.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Jul 663.5 629.5 655.25 24.75
21-Sep 588 546.75 577.5 30.5
Soybeans        
21-Jul 1408.25 1330.75 1396 67.5
21-Sep 1328 1259.5 1317.25 61
Soymeal                $/ton        
21-Aug 376.3 360.9 373.8 11.8
Soyoil                    cents/lb        
21-Aug 57.67 53.73 56.71 2.51
Wheat                    $/bushel        
21-Jul 668.5 639 662.75 23
21-Sep 671.5 642.5 665.75 21.5
KC Wheat        
21-Jul 616.25 585.5 606.5 19.75
21-Sep 625.75 594.75 615.75 20
MPLS Wheat        
21-Jul 779.25 742.75 762.5 8.25
21-Sep 783.75 746.75 766.25 6.5
Live Cattle             cents/lb        
21-Jun 121.95 120.925 121.25 1.15
Feeder Cattle         cents/lb        
21-Sep 159.125 157.025 157.65 -1.45
Lean Hogs             cents/lb        
21-Aug 109.625 106.5 107.15 -0.05
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 72.17 70.16 71.64 0.6
Diesel        
21-Jun 2.102 2.0432 2.093 0.0262
Unleaded Gasoline   $/gallon        
21-Jun 2.1708 2.112 2.1642 0.03
Natural Gas        
21-Aug 3.282 3.192 3.236 -0.039
Ethanol Futures        
21-Aug     2.38  
U.S. Dollar Index        
21-Sep 92.395 91.805 92.195 0.322
Gold                      $/ounce        
21-Jul 1796.5 1768.3 1772.8 -1
Copper        
21-Jun 4.1575 4.1475 4.1575 -0.027
Fertilizer Swaps     (as of 06/18)  
DAP Tampa-index      605.0 -3
DAP-New Orleans      659.2 12
Urea-New Orleans      490.5 41
Urea-Middle East      435.0 23
Urea-Black Sea      397.5 24
UAN (32%) New Orleans      358.3 3.86

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