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Afternoon Market Recap for March 8, 2021

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Corn and soybeans find modest gains.

Wheat prices take another step backwards Monday

Grain prices were lightly mixed to start the week, with most contracts failing to move more than 0.5% in either direction today. Additional reports of fieldwork delays in Brazil kept corn and soybean prices in the green. But wheat contracts slid moderately lower today on some technical selling as traders squared positions ahead of Tuesday morning’s World Agricultural Supply and Demand Estimates (WASDE) report from USDA. (Click here for an exclusive preview of tomorrow’s report.)

Wetter conditions are returning to the Corn Belt later this week, with as much as 1” to 1.5” anticipated for parts of Missouri, Illinois and Indiana between Tuesday and Friday, per NOAA’s latest 72-hour cumulative precipitation map. The agency’s 8-to-14-day outlook predicts seasonally cool weather for most of the U.S. between March 15 and March 21, meantime, with drier-than-normal conditions returning to the Midwest and Plains next week.

On Wall St., the Dow climbed 561 points to 32,057 – a new record high – after the Senate approved a coronavirus stimulus package, boosting investor confidence. President Biden is almost certain to sign the $1.9 trillion bill into law after the House approves it later this week. Energy futures stumbled, in contrast, with crude oil dropping 1.5% lower this afternoon to hover around $65 per barrel. Gasoline dropped 1%, with diesel down around 1.75%. The U.S. Dollar firmed moderately.

On Friday, commodity funds were net buyers of all major grain contracts, including corn (+32,500), soybeans (+14,500), soymeal (+1,500), soyoil (+6,000) and CBOT wheat (+3,500).

Corn

Corn prices settled slightly higher this afternoon after some light technical buying supported by reports of a slower-than normal planting pace for Brazil’s second corn crop. March futures closed up 3.5 cents to $5.6550, while May futures added 1.5 cents to $5.47.

Corn basis bids were mostly steady across the Midwest to start the week but did tilt 2 cents higher at an Illinois river terminal today.

Corn export inspections reached 60.8 million bushels last week, which failed to match the prior week’s total of 80.6 million bushels but still made its way to the higher end of trade estimates, which ranged between 47.2 million and 70.9 million bushels. China was the top destination, with 13.7 million bushels. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace, with 1.087 billion bushels.

European Union corn imports in 2020/21 are down substantially year-over-year after reaching 430.3 million bushels through March 7, according to the latest data from the European Commission.

Brazil’s second corn crop is only 54% planted, versus progress of 80% at this time last year, according to the AgRural consultancy. If rainy weather persists, further delays may be likely.

Grains are enjoying the highest pre-planting price opportunities in years. What does that mean for your plans later this spring? “These prices will incentivize you, as well as your neighbor, to try and produce as many bushels as you can, pulling more marginal acres into production,” notes Brady Huck with Advance Trading. “What gets planted on these ‘fringe’ acres could come down to insurance guarantees. It is important you are defending your planting decisions by managing the price gap between your insured coverage and the current market.” Huck shares some additional thoughts in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 318,611 contracts, trending above Friday’s final count of 288,635.

Soybeans

Soybean prices firmed slightly after a somewhat choppy session on Monday as traders squared positions ahead of Tuesday morning’s WASDE report. News of additional harvest delays in Brazil lent additional support. March futures added 3.5 cents to $14.3775, with May futures up 4.75 cents to $14.3475.

Soybean basis bids eased 2 cents lower at an Iowa river terminal Monday while holding steady elsewhere across the central U.S. today.

Soybean export inspections saw week-over-week reductions of 41%, falling to 21.6 million bushels. That was near the middle of trade estimates, however, which ranged between 14.7 million and 29.4 million bushels. China was again the No. 1 destination, with 7.8 million bushels. Cumulative totals for the 2020/21 marketing year still have a commanding lead over last year’s pace, with 1.932 billion bushels.

European Union soybean imports for the 2020/21 marketing year are up slightly year-over-year, reaching 365.2 million bushels through March 7. EU canola imports are also up from a year ago, but soymeal imports are trending 6% below last year’s pace.

Brazilian consultancy AgRural reports that the country’s soybean harvest has reached 35% completion, versus 49% at the same time a year ago. High humidity in the No. 1 production state of Mato Grosso has created some quality problems. “In addition, the large amount of soy leaving fields with high humidity has caused lines of trucks at warehouses because the standardization of the batches has been consuming more time due to excess damp,” according to AgRural.

Pakistan has purchased 21.8 million bushels of soybeans for animal feed usage, likely sourced from Brazil and/or the United States. The grain is for shipment beginning in February 2022. “Crush profit margins have come down but buyers in Pakistan are willing to book forward to ensure that they get the soybeans,” a trader told Reuters.

Preliminary volume estimates were for 177,715 contracts, inching slightly ahead of Friday’s final count of 174,234.

Wheat

Wheat prices suffered a moderate setback Monday on a round of technical selling after traders shrugged off a mostly positive set of export inspection data this morning. Prices face a generally uphill battle in the short term, with ample domestic supplies and fierce overseas competition still a concern. May Chicago SRW futures fell 6 cents to $6.47, May Kansas City HRW futures dropped 4.5 cents to $6.2175, and May MGEX spring wheat futures lost 3.5 cents to $6.4175.

Wheat export inspections rebounded from the prior week’s lackluster tally of 12.5 million bushels to a more respectable total of 17.7 million bushels. That was on the upper end of trade estimates, which ranged between 9.2 million and 18.4 million bushels. China led all destinations, with 4.8 million bushels. Cumulative totals for the 2020/21 marketing year are now at 683.1 million bushels, still trending slightly behind last year’s pace.

European Union soft wheat exports for the 2020/21 marketing year have reached 669.8 million bushels through March 7, which is trending 19% below last year’s pace so far. EU barley exports are also down slightly year-over-year.

Pakistan issued another international tender to purchase 11.0 million bushels of wheat from optional origins for shipment in five consignments between April and August. The country passed on all offers in a similar tender last week, with prices regarded as too high.

Preliminary volume estimates were for 109,456 CBOT contracts, tracking moderately higher than Friday’s final count of 77,893.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 571.25 557 565 3.5
21-May 556.25 537 547 1.5
Soybeans        
21-Mar 1453.5 1436 1437.75 3.5
21-May 1460 1431.5 1433.75 4.75
Soymeal                $/ton        
21-May 424.4 415.9 416.3 -1.6
Soyoil                    cents/lb        
21-May 53.23 52.14 52.46 0.78
Wheat                    $/bushel        
21-Mar 659.5 642.5 646.5 -7.5
21-May 662.75 639.5 646.5 -6
KC Wheat        
21-Mar 615.5 611.75 613.25 -1.75
21-May 635 613 621.75 -4.5
MPLS Wheat        
21-Mar 636.5 635.5 636 -1
21-May 652.25 635.5 641.75 -3.5
Live Cattle             cents/lb        
21-Apr 119.75 118.75 119.3 0.275
Feeder Cattle         cents/lb        
21-Apr 140.5 138.625 139.65 0.625
Lean Hogs             cents/lb        
21-May 90 88.925 89.675 0.2
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 67.98 64.57 64.85 -1.24
Diesel        
21-Apr 1.9868 1.8988 1.9073 -0.0367
Unleaded Gasoline   $/gallon        
21-Mar 2.1119 2.0314 2.0438 -0.0209
Natural Gas        
21-May 2.77 2.664 2.7 -0.039
Ethanol Futures        
21-May     1.731  
U.S. Dollar Index        
21-Mar 92.44 91.865 92.325 0.335
Gold                      $/ounce        
21-Apr 1712 1673.3 1679.3 -18.7
Copper        
21-Mar 4.1615 4.018 4.0995 0.0125
Fertilizer Swaps     (as of 03/08)  
DAP Tampa-index              580.0 0
DAP-New Orleans              577.6 2
Urea-New Orleans              399.0 10
Urea-Middle East              395.5 3
Urea-Black Sea              370.0 3
UAN (32%) New Orleans              264.6 13.78
 
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