Afternoon Market Recap for May 18, 2021

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Corn holds on to moderate gains.

Soybeans and wheat spill into the red in Tuesday’s session

Grain prices entered today’s session with moderate overnight gains, but only corn managed to close higher, thanks to some technical buying inspired by export optimism and slower-than-expected planting progress. But rains moving across the Midwest and Plains put negative pressure on soybeans and wheat today. July soybean futures dropped 0.8%, while most wheat losses came in at less than 0.5%.

More rainy weather is bound for the Midwest and Plains later this week, with much of the upper Midwest likely to see 1” or more between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally wet weather for the Corn Belt between May 25 and May 31, with warmer-than-normal temperatures still likely for the eastern half of the country during that time.

On Wall St., the Dow dropped 98 points in afternoon trading to 34,228 as a round of weaker-than-normal housing data soured investor sentiment today. Energy futures also spilled into the red. Crude oil dropped 1.25% this afternoon to fall back below $66 per barrel. Diesel and gasoline were both down around 0.25%. The U.S. Dollar softened moderately.

On Monday, commodity funds were roughly net even when trading corn and soybean contracts and were net buyers of soyoil (+7,000) but net sellers of soymeal (-4,500) and CBOT wheat (-5,000).

Corn

Corn prices held onto moderate gains today after some technical buying largely spurred by export optimism after another large sale to China was announced this morning. Slower-than-expected planting progress generated some additional tailwinds today. July futures gained 6.75 cents to $6.5925, with September futures up 5.5 cents to $5.72.

Corn basis bids were steady to mixed across the central U.S. Tuesday, moving 1 to 3 cents higher at three interior river terminals while sliding as much as 3 cents lower at an Illinois ethanol plant today.

This morning, 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. Large grain sales have been reported nine days in May so far – click here to see a rundown.

Corn planting progress reached 80% through Sunday. That’s up from the prior week’s mark of 67% but four points lower than the average trade guess of 84%. Still, 2021 progress is two points ahead of 2020’s pace of 78% and well above the prior five-year average of 68%. Corn emergence jumped from 20% a week ago up to 41% through Sunday. That’s slightly ahead of last year’s pace of 40% and moderately faster than the prior five-year average of 35%.

China imported 72.8 million bushels of corn in April – that’s a year-over-year increase of nearly 109%. Year-to-date corn imports are now at 337.8 million bushels, a threefold increase compared to the first four months of 2020, according to data from China’s General Administration of Customs.

While grain market analyst Bryce Knorr admits it’s way too early to be forecasting corn yields, “the puzzle pieces pointing to the size of this year’s harvest are starting to fall into place after an important milestone this week.” Knorr offers additional explanation and analysis in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 282,355 contracts, falling moderately short of Monday’s final count of 370,087.

Soybeans

Soybean prices stumbled Tuesday after collecting moderate overnight gains. Prices eroded steadily through much of the morning before stabilizing for the last two hours of today’s session and finishing in the red. July futures dropped 13 cents to $15.7450, while August futures lost 4.5 cents to $15.21.

Soybean basis bids were mostly steady to lower Tuesday, falling 4 to 20 cents lower across half a dozen Midwestern locations today. An Illinois river terminal bucked the overall trend after rising 6 cents higher.

Soybean plantings are progressing slightly faster than expected, meantime. Progress reached 61% through Sunday, versus the average trade guess of 60% and the prior week’s mark of 42%. Planting pace has jumped well ahead of 2020’s pace of 51% and far beyond the prior five-year average of 37%. Crop emergence moved from 10% a week ago up to 20% through Sunday. That’s also a faster pace than 2020’s 16% and the prior five-year average of 12%.

Brazil’s Anec is now predicting the country’s soybean exports will climb to 594.8 million bushels in May, which is 7% higher than its estimates from a week ago. The group still expects Brazilian corn exports will effectively zero out this month.

In India, high soybean prices could lead to an increase of 10% or more planted acres this year. The country planted 29.233 million acres last year, with a total production of around 382 million bushels.

Preliminary volume estimates were for 156,447 contracts, moving slightly above Monday’s final count of 148,888.

Wheat

Wheat prices slid slightly lower on some technical selling today, as traders mostly shrugged off USDA’s downgrading of winter wheat quality yesterday afternoon, but losses were mostly minimal today. July Chicago SRW futures fell 2 cents to $6.9775, July Kansas City HRW futures dropped 3.5 cents to $6.4875, and July MGEX spring wheat futures eased 1.25 cents to $7.1375.

Spring wheat plantings are now at 85% through Sunday, up from 70% a week ago but one point below the average trade guess of 86%. Last year’s pace was just 57%, with the prior five-year average at 71% through the first two weeks of May. Forty-seven percent of the crop is emerged, versus the prior five-year average of 36%.

For winter wheat, more than half (53%) of the 2020/21 crop is now headed, up from 38% a week ago. That’s a bit below 2020’s pace of 54% and the prior five-year average of 58%. Quality ratings dipped a point lower, with 48% of the crop now rated in good-to-excellent condition. Analysts were expecting to see a one-point improvement, in contrast. Another 33% is rated fair (unchanged from last week), with the remaining 19% rated poor or very poor (up a point from last week).

Chinese wheat imports reached 33.1 million bushels in April, a year-over-year increase of more than 146%. Year-to-date imports are at 140.7 million bushels, which is nearly 135% above 2020’s pace so far.

European grain trade association Coceral boosted its estimates for EU 2020/21 soft wheat production to 4.810 billion bushels, an increase of 3.4% from its March projection. The group also slightly raised its estimates for 2021 EU corn production, now at 2.547 billion bushels.

Japan issued a regular tender to purchase 4.5 million bushels of food-quality wheat from the United States, Canada and Australia that closes later this week. Of the total, 52% is expected to be sourced from the U.S. The grain is for shipment in July.

Bangladesh issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins that closed on May 30. The grain is for shipment 40 days after a contract is signed.

Preliminary volume estimates were for 94,936 CBOT contracts, trending 19% higher than Monday’s final count of 79,465.

 

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Jul 669.5 652.5 658.25 6.75
21-Sep 577.5 566.5 571 5.5
Soybeans        
21-Jul 1604.75 1569 1574.25 -13
21-Sep 1452.75 1430.75 1438.5 -1
Soymeal                $/ton        
21-Aug 413.5 407.9 408.4 -1.8
Soyoil                    cents/lb        
21-Aug 66.29 64.03 64.88 0.09
Wheat                    $/bushel        
21-Jul 718.5 692.5 698 -2
21-Sep 717.25 693 699 -0.75
KC Wheat        
21-Jul 670.5 642.5 647.75 -3.5
21-Sep 675.5 647.75 653.5 -3.25
MPLS Wheat        
21-Jul 726.25 710 714 -1.25
21-Sep 732.25 716.25 720.75 -0.75
Live Cattle             cents/lb        
21-Jun 117.225 116 116.8 1.45
Feeder Cattle         cents/lb        
21-Aug 153.375 150.7 151.8 -0.95
Lean Hogs             cents/lb        
21-Jul 111.9 108.975 111.8 2.85
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 67.01 64.11 65.45 -0.82
Diesel        
21-Jun 2.0777 2.0191 2.0547 -0.0057
Unleaded Gasoline   $/gallon        
21-Jun 2.18 2.1177 2.1593 0.001
Natural Gas        
21-Jul 3.191 3.076 3.079 -0.085
Ethanol Futures        
21-Jul     2.34  
U.S. Dollar Index        
21-Jun 90.19 89.675 89.765 -0.377
Gold                      $/ounce        
21-Jun 1875.9 1863.5 1868 0.5
Copper        
21-May 4.776 4.735 4.7355 0.014
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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