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Afternoon Market Recap for March 3, 2021

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Volatile week marches on.

Grain prices captured big gains on Tuesday, but most of that upside was taken back in Wednesday’s session, with corn, soybean and wheat prices all trending significantly lower on a round of technical selling and profit-taking today. Corn prices fell nearly 2%, with most wheat contracts losing double digits. Soybean losses were more muted after prices faded about 0.25% lower.

The Southern Plains will see some rains between Thursday and Sunday, but the rest of the central U.S. is unlikely to gather any additional moisture during this time, per the latest 72-hour cumulative precipitation map from NOAA. In contrast, the agency’s 8-to-14-day outlook calls for seasonally wet weather for most of the country between March 10 and March 16, with warmer-than-normal conditions probable for the eastern half of the country.

On Wall St., the Dow drifted 25 points lower in afternoon trading to 31,366. Investors remain skittish about rising bond yields, which many see as a signal for inflation ahead. However, losses remained minimal amid the ongoing coronavirus vaccine rollout, which is expected to boost the economy. Energy futures moved higher, with crude oil jumping ahead 2.5% to climb back above $61 per barrel. Diesel saw gains of around 1.75%, with gasoline up around 1%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+17,500), soybeans (+15,500), soymeal (+2,000), soyoil (+2,500) and CBOT wheat (+10,000).

NOTE: Farm Futures regularly surveys our audience about a variety of production and management topics. The responses help inform future content – please take a few minutes to participate here.

Corn

Corn prices swung nearly 2% lower Wednesday on a round of technical selling and profit-taking as traders took the opportunity to unwind a portion of their significant net long position. March futures dropped 10.75 cents to $5.50, with May futures losing 10.5 cents to $5.3450.

Corn basis bids dropped 3 to 5 cents lower at two ethanol plants and firmed 3 cents at two other Midwestern locations while holding steady elsewhere across the central U.S. today.

Ahead of Thursday morning’s weekly export report from USDA, analysts think the agency will show corn sales ranging between 17.7 million and 41.3 million bushels for the week ending February 25. Actuals will need to make it to the middle of trade estimates to surpass the prior week’s tally of 23.5 million bushels.

Per the latest data from the U.S. Energy Information Administration, out earlier today, weekly ethanol production improved 29% to a daily average of 849,000 barrels, but that’s still well below normal totals over the past several months. Production was disrupted by bitterly cold weather in mid-February and has yet to truly rebound. Ethanol stocks retreated to a 12-week low, meantime.

Brazil’s second corn crop has seen significant delays in planting due to rainy weather impacting the country’s soybean harvest. That means more and more of this season’s safrinha crop will be planted outside of the ideal window. Analysis suggests total corn acres for the 2020/21 season could be around 46.2 million acres.

Algeria issued an international tender to purchase 1.2 million bushels of corn from optional origins, which closes tomorrow. The grain is for shipment by April 15.

Grain traveling the nation’s railways tacked on another 23,530 carloads last week, bringing year-to-date totals to 201,204 carloads. That puts 2021 off to a 28% hotter start versus last year.

If taxes are front of mind right now, you might be interested in the interest paid, according to Bob Krogmeier, CPA with CliftonLarsonAllen LLP. “One thing you want to remember about interest is that it is an expense every day you have that loan; this is accrued interest,” he notes. “Accrued interest is important when we analyze cost of production because it keeps our revenue and expenses in the same period. That way we can get a more accurate representation of profit and loss.” Krogmeier explains additional tax nuances in the latest “By the Books” blog – click here to learn more.

Preliminary volume estimates were for 245,887 contracts, falling moderately below Tuesday’s final count of 304,364.

Soybeans

Soybean prices faced modest losses Wednesday from spillover weakness in crumbling corn and wheat prices, and with analysts expecting another lackluster round of export sales in USDA’s next weekly report, out early tomorrow morning. Expectations for a record-breaking harvest in Brazil applied additional downward pressure today. March futures dropped 3.5 cents to $14.1050, with May futures down 5.25 cents to $14.0725.

Soybean basis bids were largely steady across the central U.S. Wednesday but did tilt 5 cents higher at a Nebraska processor while sliding a penny lower at an Ohio elevator today.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 3.7 million and 29.4 million bushels for the week ending February 25, expressing some confidence that volume will surpass the prior week’s tepid tally of 8.8 million bushels.

Analysts also expect to see between 100,000 and 300,000 metric tons of soymeal sales last week, plus another zero to 25,000 MT of soyoil sales.

Worried about the upcoming spring rush and all the activities that entails? Davon Cook, family business consultant with K-Coe Isom has some advice on how to “manage people, equipment, inputs, family and markets – without missing a beat. Click here for details.

Preliminary volume estimates were for 148,592 contracts, sliding 19% below Tuesday’s final count of 183,707.

Wheat

Wheat prices faced significant cuts yesterday on a round of technical selling spurred by losses in other commodities, and with export sales facing a recent downward trend. May Chicago SRW futures fell 11.5 cents to $6.5475, May Kansas City HRW futures dropped 9.5 cents to $6.2575, and May MGEX spring wheat futures lost 3.5 cents to $6.4175.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show wheat sales ranging between 3.7 million and 22.9 million bushels for the week ending February 25. The prior week’s volume of old crop sales stumbled to a marketing-year low of 6.2 million bushels.

Ukraine’s wheat exports for the 2020/21 marketing year have reached 506 million bushels, per the country’s economy ministry. Total grain exports are down more than 21% this year after Ukraine failed to match 2019’s record-breaking harvest last fall.

Japan purchased 3.0 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. Roughly two-thirds of the total was sourced from the U.S. The grain is for shipment between April 21 and May 20.

Jordan passed on all offers for its international tender to purchase 4.4 million bushels of milling wheat from optional origins that closed earlier today. No reason was given, but prices were likely regarded as too high.

Preliminary volume estimates were for 74,181 CBOT contracts, sliding below Tuesday’s final count of 94,017.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 560 548 550.25 -10.75
21-May 544.25 532.75 535.25 -10.5
Soybeans        
21-Mar 1417.5 1400.25 1410.75 -3.5
21-May 1417.75 1395.25 1407.5 -5.25
Soymeal                $/ton        
21-May 423.8 415.7 418.8 -3.6
Soyoil                    cents/lb        
21-May 50.03 49.25 49.78 0.17
Wheat                    $/bushel        
21-Mar 658.25 645.75 652 -11.25
21-May 666 650.75 656 -11.5
KC Wheat        
21-Mar 616 615.5 617.5 -11.5
21-May 635.5 622.75 626 -9.5
MPLS Wheat        
21-Mar 635 635 635.5 -5.25
21-May 646.25 636 643 -3.5
Live Cattle             cents/lb        
21-Apr 119.825 119.075 119.35 -0.075
Feeder Cattle         cents/lb        
21-Apr 141.6 139.675 141.25 0.775
Lean Hogs             cents/lb        
21-May 90.85 88.525 89.325 1.4
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 61.99 59.24 61.4 1.65
Diesel        
21-Apr 1.8487 1.801 1.8399 0.0318
Unleaded Gasoline   $/gallon        
21-Mar 1.9711 1.9241 1.9539 0.0175
Natural Gas        
21-May 2.916 2.839 2.847 -0.028
Ethanol Futures        
21-Apr     1.814  
U.S. Dollar Index        
21-Mar 91.075 90.635 90.94 0.15
Gold                      $/ounce        
21-Apr 1739.1 1699.4 1718.4 -14.7
Copper        
21-Mar 4.2225 4.139 4.1565 -0.075
Fertilizer Swaps     (as of 03/01)  
DAP Tampa-index              580.0 50
DAP-New Orleans              576.0 -4
Urea-New Orleans              388.6 13
Urea-Middle East              392.5 8
Urea-Black Sea              267.5 8
UAN (32%) New Orleans              250.8 14.88

 

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