Afternoon Market Recap for May 13, 2021

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WASDE hangover slams grain prices.

Corn, soybeans and wheat all faced significant cuts Thursday

Technical selling and profit-taking plagued grain prices Thursday after traders had more time to digest some bearish data from USDA’s World Agricultural Supply and Demand Estimates (WASDE) report, out yesterday. Planting pressure is also creating short-term headwinds, as is a strengthening U.S. Dollar. Corn prices were hit the hardest, with July futures finishing the session limit down. July soybean futures dropped 3.5%, and some wheat contracts lost more than 4% today.

More wet weather is headed to the western Corn Belt – particularly in Kansas and Missouri, which could gather another 2” between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally wet weather for much of the central U.S. between May 20 and May 26, with warmer-than-normal temperatures likely for most of the U.S. during that time.

On Wall St., the Dow rebounded 484 points to climb back above 34,000 after suffering heavy losses yesterday. Sectors tied to the reopening economy (e.g. airlines) led the way today. Investors remain leery of inflation trends and the possibility for higher interest rates. Energy prices saw significant cuts today, in contrast. Crude oil fell 3.5% lower on worries over soaring coronavirus cases in India and some supply chain disruptions in the United States. Diesel dropped 3.25%, with gasoline down nearly 3%. The U.S. Dollar firmed slightly.

On Wednesday, commodity funds were net buyers of soybeans (+10,000), soymeal (+5,000) and soyoil (+6,500) contracts but were net sellers of corn (-32,000) and CBOT wheat (-9,000).

Need to catch up on key findings from yesterday’s WASDE report? We have you covered – click here for our exclusive news and analysis, and click here to listen to a podcast that gives additional insights and what to watch for next.

Corn

Corn prices saw steep cuts Thursday, as traders shrugged off a new large sale to China announced this morning, focusing instead on USDA’s bearish supply and demand data and an acceleration in planting progress. That led to a round of technical selling and profit-taking today, with May futures dropping 38.5 cents to $7.19 and July futures falling 40 cents to $6.7475.

Corn basis bids were steady to soft after falling 2 to 9 cents lower across a handful of Midwestern locations on Thursday after many end-users are facing pressure from recent boosts to commodity prices and barge traffic disruptions on the Mississippi River today.

Private exporters announced to USDA the sale of 26.8 million bushels of corn for delivery to China during the 2021/22 marketing year, which begins September 1.

Corn exports saw just 4.5 million bushels in old crop sales last week, but new crop sales came in at 82.0 million bushels, leading to a total tally of 86.5 million bushels. That was on the higher end of trade estimates, which ranged between 31.5 million and 94.5 million bushels. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace, with 1.773 billion bushels.

Corn export shipments fell 30% week-over-week and 18% below the prior four-week average to 60.8 million bushels. China was the No. 1 destination, with 14.0 million bushels.

Forecasters with the U.S. Climate Prediction Center indicated today that La Niña conditions have shifted back to ENSO-neutral conditions, which will likely continue throughout the summer for the Northern Hemisphere. La Niña has a 50% to 55% chance of returning in late fall or winter. Click here to learn more about how ENSO cycles can affect grain production around the world.

Consultancy Strategie Grains fractionally raised its estimates for this year’s European Union corn crop to 2.567 billion bushels. That would be a year-over-year increase of around 3%, if realized.

Preliminary volume estimates were for 526,269 contracts, moving moderately above Wednesday’s final count of 422,634.

Soybeans

Soybean prices eroded throughout Thursday’s session on a round of profit-taking and technical selling partly triggered by planting pressure and spillover weakness from other grains. May futures were down 48.25 cents to $16.1225, while July futures plummeted 59 cents lower, closing at $15.8350.

Soybean basis bids saw some significant erosion Thursday after facing double-digit losses at five Midwestern locations today.

Old crop soybean sales fell 43% lower week-over-week to 3.5 million bushels. New crop sales added another 3.8 million bushels, for a total of 7.3 million bushels. Analysts were generally expecting a bigger tally, with trade guesses ranging between 7.3 million and 24.6 million bushels. Cumulative totals for the 2020/21 marketing year still hold a commanding lead over last year’s pace, with 2.080 billion bushels.

Soybean export shipments improved 8% week-over-week but stayed 8% below the prior four-week average, with 10.5 million bushels. Mexico was the No. 1 destination, with 3.7 million bushels.

With May’s WASDE report in the rearview mirror, what should we be watching next? Naomi Blohm, senior market adviser with Stewart Peterson, suggests monitoring May futures as they come off the board, the state of Mississippi River closures, crushing facility trends and more. Click here to read Blohm’s latest analysis in the latest Ag Marketing IQ blog.

Preliminary volume estimates were for 279,536 contracts, inching slightly above Wednesday’s final count of 270,729.

Wheat

Wheat prices shifted significantly lower after a round of technical selling Thursday, falling back below multiyear highs but remaining in relatively good shape overall (despite today’s selloff). Spillover weakness from corn and soybeans applied additional headwinds today. July Chicago SRW futures fell 24.5 cents to $7.0525, July Kansas City HRW futures lost 29.5 cents to $6.6125, and July MGEX spring wheat futures dropped 22.25 cents to $7.4325.

Old crop wheat exports tumbled 61% below the prior four-week average to 1.1 million bushels. New crop sales added another 9.8 million bushels, bringing the total to 10.9 million bushels. Trade guesses were varied leading up to the report, ranging between 2.8 million and 15.4 million bushels. Cumulative totals for the 2020/21 marketing year are still tracking slightly ahead of last year’s pace, with 845.3 million bushels.

Wheat export shipments slipped 3% below the prior four-week average, to 19.2 million bushels. China was the No. 1 destination, with 7.4 million bushels.

Consultancy Strategie Grains held its forecast steady for 2020/21 European Union soft wheat production, keeping it at 4.762 billion bushels. That would be a year-over-year increase of 8.5%, if realized. Export estimates moved slightly higher, to 1.010 billion bushels.

Russian consultancy SovEcon has raised its forecast for the country’s 2021 wheat production by 36.7 million bushels to reach 3.002 billion bushels, based on a larger than previously expected harvest area. “The weather has been favorable for the new wheat crop prospects in recent weeks,” the consultancy added in a note. “We see good moisture reserves in almost all wheat regions.”

Preliminary volume estimates were for 142,782 CBOT contracts, climbing moderately above Wednesday’s final count of 93,937.

 

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 769 717.5 719 -38.5
21-Jul 714 674.75 674.75 -40
Soybeans        
21-May 1657 1598 1612.25 -48.25
21-Jul 1645.25 1575 1584 -59
Soymeal                $/ton        
21-Jul 450.3 420.2 421.4 -28.3
Soyoil                    cents/lb        
21-Jul 66.86 65.05 65.78 -0.47
Wheat                    $/bushel        
21-May 756.5 737 726.5 -28.25
21-Jul 734.25 690.75 701.5 -24.5
KC Wheat        
21-May 677.5 672.5 652.25 -10.25
21-Jul 693.75 651 657.75 -29.5
MPLS Wheat        
21-May     745.5  
21-Jul 765.75 727.75 741.25 -22.25
Live Cattle             cents/lb        
21-Jun 118.675 114.7 115.4 -3.2
Feeder Cattle         cents/lb        
21-Aug 153.95 148.2 150.425 -0.1
Lean Hogs             cents/lb        
21-Jun 111.525 109.7 110 -2.025
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 65.81 63.09 63.66 -2.42
Diesel        
21-Jun 2.069 1.9827 1.9956 -0.0739
Unleaded Gasoline   $/gallon        
21-Jun 2.1606 2.077 2.0912 -0.0698
Natural Gas        
21-Jul 3.047 2.986 3.019 0.001
Ethanol Futures        
21-Jun 2.34 2.34 2.34 0
U.S. Dollar Index        
21-Jun 90.91 90.575 90.73 0.044
Gold                      $/ounce        
21-Jun 1829.1 1808.4 1814.3 -8.3
Copper        
21-May 4.764 4.665 4.708 -0.0445
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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