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Afternoon Market Recap for May 14, 2021

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Corn prices continue to slump.

Most wheat contracts trended slightly higher Friday, with soybean prices mixed

On Thursday, traders slashed corn prices dramatically as they unwound a portion of their net long position on a round of technical selling and profit-taking. That pattern continued today, with prices tumbling around 4.5% lower by the close. Wheat prices were in the red for much of the session but pulled ahead to close slightly in the green. Soybean contracts were mixed amid a round of uneven maneuvering. This is the last session that May contracts are on the board.

Wet weather is returning to the Central Plains and parts of the Corn Belt starting this weekend, with some areas bracing for another 3” or more between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally wet weather across the central U.S. is also a feature of NOAA’s latest 8-to-14-day outlook, which also predicts warmer-than-normal conditions for most of the country between May 21 and May 27.

On Wall St., the Dow moved higher again on Friday after seeing sharp cuts earlier this week – rising 396 points in afternoon trading to 34,418 as a very volatile week draws to a close. Inflation fears are still lurking in the background. Energy futures also trended higher today, with crude oil up nearly 2.5% this afternoon to move back above $65 per barrel. Diesel rose 1.75%, with gasoline up more than 1.25%. The U.S. Dollar softened moderately.

On Thursday, commodity funds were net sellers of all major grain contracts, including corn (-65,000), soybeans (-27,500), soymeal (-18,500), soyoil (-5,500) and CBOT wheat (-16,500).

Need to catch up on key findings from Wednesday’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 spilled into the red for a third consecutive session today as traders continue to liquidate a portion of their net long position. That left prices dramatically lower again on Friday and down more than 80 cents on the week. Today, May futures dropped 34 cents to $6.85, with July futures down 30 cents to $6.4475.

Corn basis bids were steady to soft Friday after falling 3 to 6 cents lower across half a dozen Midwestern locations today.

Private exporters announced to USDA the sale of 53.5 million bushels of corn for delivery to China during the 2021/22 marketing year, which begins September 1. China has been an active buyer of U.S. corn overall in recent weeks.

IHS Markit Agribusiness is estimating 2021 U.S. corn plantings at 96.849 million acres. That’s up from the group’s March estimates of 94.294 million acres.

Julio Bravo, CEO of AgroBravo, offers some quantification of how a recent spell of dry weather has been impacting Brazilian corn production in the latest South America Crop Watch blog. “The lack of rain in important producing regions (a great share of Brazil’s territory) in the past weeks may limit the crop yield in about 40% of the impacted acres,” he writes. “The potential production was set at 90 million tons (3.5 billion bushels of corn), but with the irreversible losses in big producing states due to drought, this number will most likely fall to 75 million tons (2.9 billion bushels of corn), a reduction of around 16% compared to last year.” Click here to learn more.

The 2021 corn planting season is nearly wrapped up in France, with 95% of this year’s crop now in the ground through May 10, according to farm office FranceAgriMer. That’s up from 89% the prior week.

Barge traffic continues to face significant backups on the Mississippi River as repairs are needed on a bridge in Memphis, Tenn. More than a thousand barges were in a queue before traffic resumed this morning. The bridge remains closed to vehicle traffic for now.

Want to learn more about the damaged Memphis bridge that caused logistical chaos this week? It’s a part of the latest edition of “7 ag stories you may have missed.” This week’s batch of content also includes stories on the Kansas winter wheat crop, an update on the 2021 Atlantic Ocean hurricane season and more – click here to catch up.

Preliminary volume estimates were for 537,681 contracts, inching slightly higher than Thursday’s final count of 526,082.

Soybeans

Soybean prices showed some recovery after a mixed round of technical maneuvering today in a sometimes choppy session. May futures dropped 8.5 cents to $16.0375, while July futures added 7 cents to reach $15.91.

Soybean basis bids were steady to soft, falling 3 to 5 cents lower at three interior river terminals on Friday and moving as much as 7 cents lower at an Indiana processor today.

IHS Markit Agribusiness is now projecting 2021 U.S. soybean plantings at 88.485 million acres, down moderately from its March estimate of 89.730 million acres. That’s still above USDA’s March 31 estimate of 87.6 million acres it made in this year’s Prospective Plantings report.

China’s sow herd moved 1.1% higher between March and April and 23% higher year-over-year, despite some recent outbreaks of African swine fever. Hog herd inventories have mostly returned to normal, according to data from the country’s agriculture and rural affairs ministry. A healthy Chinese hog herd tends to be a hungry customer for U.S. grains.

Preliminary volume estimates were for 180,513 contracts, sliding moderately below Thursday’s final count of 275,239.

Wheat

Wheat prices stumbled early in Friday’s session but recovered back into the green by the close, snapping up small to moderate gains in the process on some net technical buying today. July Chicago SRW futures added 6.25 cents to $7.0775, July Kansas City HRW futures held steady at $6.5775, and July MGEX spring wheat futures picked up 4 cents to $7.4525.

IHS Markit Agribusiness expects spring wheat plantings to reach 11.610 million acres this year, which would be a year-over-year reduction of 640 million acres, if realized.

French farm office FranceAgriMer reports steady soft wheat conditions for the country’s 2020/21 crop, with 79% rated in good-to-excellent condition through May 10. Ratings had declined for the previous four consecutive weeks.

Japan purchased 4.5 million bushels of food-quality wheat from the United States, Canada and Australia in a regular tender that closed yesterday. Just under half of the total was sourced from the U.S. The grain is for shipment in July.

Preliminary volume estimates were for 122,568 CBOT contracts, moderately trailing Thursday’s final count of 142,774.

 

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 718.75 685 685 -34
21-Jul 687 641.75 643.75 -30
Soybeans        
21-May 1625 1620.75 1603.75 -8.5
21-Jul 1612.75 1577 1586.25 7
Soymeal                $/ton        
21-Jul 431.4 416.7 418.5 -1.5
Soyoil                    cents/lb        
21-Jul 67.92 65.45 67.58 2.01
Wheat                    $/bushel        
21-May 730.25 727.25 727.25 0.75
21-Jul 724.25 699.5 707.25 6.25
KC Wheat        
21-May     651.75  
21-Jul 677.75 651.25 657.75 0
MPLS Wheat        
21-May     745.25  
21-Jul 762 735 740.75 4
Live Cattle             cents/lb        
21-Jun 116.325 115.075 115.2 -0.4
Feeder Cattle         cents/lb        
21-Aug 151.725 149.2 151.25 0.75
Lean Hogs             cents/lb        
21-Jun 110.425 108.45 108.625 -1.475
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 65.4 63.33 65.33 1.51
Diesel        
21-Jun 2.0407 1.9857 2.0345 0.0336
Unleaded Gasoline   $/gallon        
21-Jun 2.1289 2.0823 2.1225 0.0272
Natural Gas        
21-Jul 3.069 3 3.016 -0.009
Ethanol Futures        
21-Jul     2.34  
U.S. Dollar Index        
21-Jun 90.795 90.27 90.31 -0.425
Gold                      $/ounce        
21-Jun 1842.1 1819 1838.1 14.3
Copper        
21-May 4.7125 4.622 4.6635 -0.042
Fertilizer Swaps     (as of 05/14)  
DAP Tampa-index              589.5 0
DAP-New Orleans              632.2 15
Urea-New Orleans              403.5 4
Urea-Middle East              362.5 13
Urea-Black Sea              337.5 23
UAN (32%) New Orleans              322.4 0

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