Afternoon Market Recap for May 5, 2021

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July corn futures push above $7.

Corn, soybeans and wheat all see positive forward momentum Wednesday

Grain prices stumbled on Monday but rebounded on Tuesday. Today, they continued to move higher on another round of technical buying inspired by tightening domestic and global stocks. Wheat prices saw the most upside, with some contracts climbing more than 2.5% higher by the close. Corn prices also rose more than 1% today. Soybeans stayed in the green, but gains were more muted after another consultancy predicted a 5-billion-bushel crop in Brazil this season.

Some additional moisture could land on the central U.S. to wrap up the week, but not much more than 0.25” will be likely in most areas between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally wet weather will be more likely further out for the Midwest and Plains, according to NOAA’s latest 8-to-14-day outlook, which covers May 12 through May 18. Seasonally cool weather is also probable for most of the Corn Belt during that time.

On Wall St., the Dow climbed 180 points in afternoon trading to 34,313 after some better-than-expected earnings reports from General Motors and others lifted investor confidence. Energy futures were narrowly mixed. Crude oil saw fractional cuts this morning, staying above $65 per barrel. Diesel and gasoline saw small gains, in contrast. The U.S. Dollar firmed slightly.

On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+22,500), soybeans (+9,000), soymeal (+4,000), soyoil (+3,000) and CBOT wheat (+5,500).

Corn

Corn prices moved even higher on another round of technical buying Wednesday, with traders sharpening their focus on tightening domestic and global stocks. (Note: USDA will release its next batch of supply and demand data a week from today.) May futures added 9.75 cents to $7.5450, while July futures rose 11 cents to $7.0775.

Corn basis bids were mostly steady but mixed across a handful of Midwestern locations Wednesday, moving as much as 6 cents higher at an Illinois river terminal and falling as much as 4 cents lower at an Iowa processor today.

Private exporters announced two more large corn sales to USDA today. The first was for 7.2 million bushels for delivery to Mexico during the 2021/22 marketing year, which begins September 1. The second was for 5.8 million bushels to unknown destination. Of that total, 1.8 million bushels is for delivery in the current marketing year, with the remaining 4 million bushels for delivery in 2021/22. Cancellations for 5.5 million bushels of corn for delivery to China were also reported today.

Ethanol production saw modest inroads again, moving from a daily average of 945,000 barrels per day the prior week up to 952,000 daily barrels for the week ending April 30, per the latest data from the U.S. Energy Information Administration, released earlier today.

Ahead of tomorrow morning’s export report from USDA, analysts expect the agency to show corn sales ranging between 11.8 million and 59.1 million bushels for the week ending April 29.

Curious about how planting progress is unfolding across the Corn Belt so far this spring? Farmers are sharing their stories on Feedback From The Field, and you can, too. Click here to see the latest updates and find out how to contribute.

Brazilian consultancy Datagro is now estimating the country’s 2020/21 corn production at 4.152 billion bushels, falling 3.5% below its prior projection. The country has struggled through some overly dry conditions in recent weeks.

The latest data from the European Commission indicates that EU corn imports during the 2020/21 marketing year have reached 485.8 million bushels through May 2. That’s a year-over-year decrease of 30% so far.

Preliminary volume estimates were for 418,035 contracts, shifting moderately above Tuesday’s final count of 375,782.

Soybeans

Soybean prices followed corn and wheat prices higher today but struggled to gain much traction after another consultancy predicted a 5-billion-bushel crop in Brazil (a record, if realized). Still, May futures added 5 cents to $15.82 and July futures picked up 3.75 cents to $15.42.

Soybean basis bids held steady across much of the central U.S. Wednesday but did jump 25 cents higher at an Indiana elevator and firm 5 cents higher at an Iowa processor today. Farmer sales have been generally slow; the general sentiment is few are holding onto any significant old-crop supplies at this point.

Ahead of Thursday morning’s weekly export report from USDA, analysts are expecting the agency to show between zero and 29.4 million bushels of soybean sales for the week ending April 29. Analysts also see soymeal sales ranging between 50,000 and 325,000 metric tons of soymeal sales last week, plus soyoil sales ranging between -10,000 and 25,000 MT.

Brazilian consultancy Datagro slightly raised its estimates for the country’s 2020/21 soybean production from its prior projection, moving it to 5.010 billion bushels. That’s on the higher end of the current range of production estimates, although nearly all projections call for at least 4.8 billion bushels this season.

European Union soybean imports for the 2020/21 marketing year are trending fractionally above last year’s pace after reaching 453.4 million bushels through May 2. EU canola imports are also up slightly year-over-year, with EU soymeal imports down moderately during the same period.

Preliminary volume estimates were for 164,208 contracts, trending slightly higher than Tuesday’s final count of 158,357.

Wheat

Wheat prices racked up significant gains today on some weather woes in the Southern Plains coupled with worries over tightening supplies, which spurred a round of technical buying. July Chicago SRW futures climbed 17.25 cents to $7.44, July Kansas City HRW futures jumped 18.25 cents to $7.1750, and July MGEX spring wheat futures rose 16 cents to $7.8425.

Ahead of tomorrow morning’s export report from USDA, analysts are expecting the agency to show wheat sales ranging between 3.7 million and 27.6 million bushels for the week ending April 29.

European Union soft wheat exports for the 2020/21 marketing year are at 813.5 million bushels through May 2, which is still trending significantly below last year’s pace of 1.102 billion bushels. EU barley exports are roughly even from a year ago, meantime, with 303.6 million bushels.

Taiwan issued an international tender to purchase 3.3 million bushels of grade 1 milling wheat from the United States, which closes May 13. The grain is for shipment between early July and early August.

The Philippines purchased 2.2 million bushels of wheat from optional origins (but thought to have been sourced from Australia) in a tender that closed yesterday. The grain is for shipment between June and July.

Preliminary volume estimates were for 86,710 CBOT contracts, drifting below Tuesday’s final count of 95,697.

 

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 756 740.75 753.25 9.75
21-Jul 712 691.25 708.5 11
Soybeans        
21-May 1591.25 1573.75 1582 5
21-Jul 1554 1532.25 1542.25 3.75
Soymeal                $/ton        
21-Jul 427.3 420.9 424.4 2.6
Soyoil                    cents/lb        
21-Jul 64.37 62.8 63.46 -0.11
Wheat                    $/bushel        
21-May 754.5 737.5 755.75 18.75
21-Jul 746 718.25 744.5 17.25
KC Wheat        
21-May 672.5   709.75  
21-Jul 719.25 691 717 18.25
MPLS Wheat        
21-May 769.25 764.25 779.5 -1.5
21-Jul 785 765.75 782 16
Live Cattle             cents/lb        
21-Jun 114.55 113.1 114.5 1.475
Feeder Cattle         cents/lb        
21-Aug 145.7 142.225 144.625 1.45
Lean Hogs             cents/lb        
21-Jun 114.575 112.55 114.325 0.775
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 66.76 64.92 65.43 -0.26
Diesel        
21-Jun 2.0278 1.9881 1.9982 -0.0006
Unleaded Gasoline   $/gallon        
21-Jun 2.1824 2.1296 2.1464 -0.0048
Natural Gas        
21-Jul 3.032 2.96 2.989 -0.023
Ethanol Futures        
21-Jun     2.34  
U.S. Dollar Index        
21-Jun 91.435 91.165 91.285 0.01
Gold                      $/ounce        
21-Jun 1785.7 1769.3 1780.9 5.1
Copper        
21-May 4.5805 4.52 4.5395 0.0035
Fertilizer Swaps     (as of 04/30)  
DAP Tampa-index              589.5 0
DAP-New Orleans              592.5 -3
Urea-New Orleans              417.8 29
Urea-Middle East              348.0 11
Urea-Black Sea              329.0 0
UAN (32%) New Orleans              316.9 -5.51
 
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