Afternoon Market Recap for May 10, 2021

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Planting progress plows into corn prices.

Wheat prices also tumble Monday, with soybean prices holding mostly steady

Planting pressure pushed corn prices down today, with progress expected to rocket ahead 21 points this past week. That gave traders an opportunity to engage in some technical selling and profit-taking as they squared positions ahead of the next World Agricultural Supply and Demand Estimates (WASDE) report, which USDA will release Wednesday morning. Corn prices ultimately spilled 2.5% to 3.25% lower. Wheat prices were also down significantly today, with most contracts down 4.5% to 5.75%. Soybeans were relatively spared, finishing the session with just minor changes.

Little to no additional rains will fall on the Midwest and Plains between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA, although a small portion of western Kansas and eastern Colorado could see 1” to 2” during that time. NOAA’s 8-to-14-day outlook expects seasonally wet weather returning to the Corn Belt between May 17 and May 23, with widespread warmer-than-normal temperatures also likely next week.

On Wall St., the Dow continues to carve out fresh records, rising another 104 points in afternoon trading to 34,882. The financial, industrial and energy sectors – which all are leaning heavily on economic recovery – have tended to do well in recent weeks. Crude oil was holding steady in afternoon trading, at just under $65 per barrel, while gasoline and diesel each trended about 0.2% higher. The U.S. Dollar softened slightly.

On Friday, commodity funds were net buyers of all major grain contracts, including corn (+10,000), soybeans (+11,000), soymeal (+10,000), soyoil (+2,500) and CBOT wheat (+4,500).

Corn

Corn prices stumbled significantly on a round of technical selling and profit-taking today, triggered by ample planting progress this past week and as traders took the opportunity to unload some of their very net long position ahead of Wednesday’s WASDE report. May futures tumbled 24.75 cents to $7.48, with July futures down 19 cents to $7.1325.

Corn basis bids were steady to mixed across the central U.S. Monday, firming as much as 5 cents higher at an Ohio elevator while sliding a penny lower at an Illinois river terminal today.

Private exporters announced to USDA the sale of 40.2 million bushels of corn for delivery to China during the 2021/22 marketing year, which begins September 1. Exporters also announced a China corn cancellation of 11.0 million bushels of corn that had been for delivery during the current marketing year.

Corn export inspections reached 67.2 million bushels last week, spilling moderately lower from a week ago but still making it to the higher end of trade estimates, which ranged between 43.3 million and 86.6 million bushels. Mexico and China led all destinations, with 13.2 million bushels each. Cumulative totals for the 2020/21 marketing year extended its already impressive lead over last year’s pace, climbing to 1.778 billion bushels.

Ahead of the next crop progress report from USDA, out later this afternoon, analysts anticipate corn plantings are 67% complete through May 9, up from 46% a week ago. Analysts offered individual guesses ranging between 62% and 71%.

European Union corn imports for the 2020/21 marketing year are still down moderately from a year ago, reaching 500.8 million bushels through May 9 – a year-over-year decline of 29% so far, per the latest data from the European Commission.

According to past Farm Futures surveys, larger farms can be three times more vulnerable to financial risk. That’s one big reason why we brought on Dick Wittman, Idaho rancher and farm management consultant, as the keynote speaker for the 2021 Farm Futures Business Summit, returning live June 16-17 in Coralville, Iowa. Click here to for a sneak peek at what Wittman and other speakers will be covering at this event.

Preliminary volume estimates were for 375,497 contracts, trending moderately below Friday’s final count of 487,542.

Soybeans

Soybean prices wobbled in a choppy session but closed with very minor changes amid some uneven technical maneuvering today. May futures picked up 1.5 cents to $16.2250, but July futures slid 2.5 cents lower to $15.8725 as traders attempted to balance solid planting pace this past week against historically low domestic stocks.

Soybean basis bids fell 8 cents lower at an Illinois river terminal while firming 2 cents higher at an Iowa river terminal and holding steady elsewhere across the central U.S. Monday.

Soybean export inspections saw week-over-week improvements of 64%, reaching 8.7 million bushels. That was on the higher end of analyst estimates, which ranged between 3.7 million and 11.0 million bushels. Indonesia and Mexico were the top two destinations, accounting for 2.7 million bushels apiece. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace after reaching 2.046 billion bushels.

Ahead of the next weekly progress report from USDA, out later Monday afternoon, analysts expect the agency to show 40% of this year’s soybean crop has been planted through May 9, up from 24% a week earlier.

European Union soybean imports during the 2020/21 marketing year reached 475.8 million bushels through May 9. That’s slightly above last year’s pace. EU canola imports are also trending slightly higher year-over-year, while EU soymeal imports are moderately below last year’s pace.

Preliminary volume estimates were for 171,492 contracts, sliding below Friday’s final count of 215,149.

Wheat

Wheat prices took a massive hit Monday on a round of technical selling spurred by improving weather forecasts for the Great Plains. Spillover weakness from corn applied additional headwinds today. July Chicago SRW futures tumbled 33.25 cents to $7.2850, July Kansas City HRW futures dropped 35.25 cents to $7.0150, and July MGEX spring wheat futures lost 46.5 cents to $7.51.

Wheat export inspections inched slightly ahead of the prior week’s tally to 20.0 million bushels. That was also on the higher end of trade guesses, which ranged between 13.8 million and 22.0 million bushels. China was the No. 1 destination, with 7.4 million bushels. Cumulative totals for the 2020/21 marketing year are slightly ahead of last year’s pace, with 870.7 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect to see 69% of this year’s spring wheat crop planted through May 9, up from 49% a week earlier. For winter wheat, analysts are expecting quality ratings to hold steady, with 48% of the crop rated in good-to-excellent condition.

China sold another 5.2 million bushels of its state wheat reserves last week, which was only 3.6% of the total available for sale. China has offered nine other wheat auctions since the beginning of March as it attempts to lower feed costs for its domestic livestock and poultry producers.

European Union soft wheat exports during the 2020/21 marketing year have reached 839.2 million bushels through May 9. That’s down 25% from last year’s pace so far. EU barley exports are only fractionally lower year-over-year, with 306.8 million bushels.

Indonesia issued an international tender to purchase 6.6 million bushels of animal feed wheat from optional origins that closes tomorrow. The grain is divided into six consignments that are for arrival between June and August.

South Korea purchased 2.2 million bushels of animal feed wheat, likely sourced from the Black Sea region, in a private deal that closed on Friday. The grain is for arrival around August 10.

Preliminary volume estimates were for 103,125 CBOT contracts, inching slightly above Friday’s final count of 101,895.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 770.5 744.75 748 -24.75
21-Jul 730.75 708.5 711.75 -19
Soybeans        
21-May 1627 1613.25 1620 1.5
21-Jul 1593.75 1575.25 1587.5 -2.5
Soymeal                $/ton        
21-Jul 444.8 436 442.3 0.8
Soyoil                    cents/lb        
21-Jul 64.58 63.22 63.84 -0.6
Wheat                    $/bushel        
21-May 769 746 742.5 -31
21-Jul 760.75 727.25 730.5 -33.25
KC Wheat        
21-May 713.25 713.25 695.5 -14.5
21-Jul 736 700.75 703.5 -35.25
MPLS Wheat        
21-May 776.5   745.75  
21-Jul 796.5 750.75 753.25 -46.5
Live Cattle             cents/lb        
21-Jun 118.4 116.1 118.35 2.325
Feeder Cattle         cents/lb        
21-Aug 149.1 145.475 149.1 4.825
Lean Hogs             cents/lb        
21-Jun 112.675 111.075 112.25 -0.6
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 65.75 63.95 64.89 -0.01
Diesel        
21-Jun 2.0776 1.9958 2.0156 0.005
Unleaded Gasoline   $/gallon        
21-Jun 2.217 2.1128 2.1324 0.0055
Natural Gas        
21-Jul 3.015 2.948 2.976 -0.028
Ethanol Futures        
21-Jun     2.34  
U.S. Dollar Index        
21-Jun 90.325 90.015 90.205 -0.011
Gold                      $/ounce        
21-Jun 1846.3 1830.5 1841.7 10.6
Copper        
21-May 4.8985 4.708 4.728 -0.038
Fertilizer Swaps     (as of 05/07)  
DAP Tampa-index              589.5 0
DAP-New Orleans              617.3 25
Urea-New Orleans              399.6 -18
Urea-Middle East              350.0 2
Urea-Black Sea              314.5 -15
UAN (32%) New Orleans              322.4 5.51


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