Afternoon Market Recap for Nov. 23, 2020

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Soybeans move closer to $12 per bushel.

Corn and most wheat contracts also finished Monday’s session higher

Will we be giving thanks for $12 soybeans later this week? That benchmark is certainly within striking distance after prices firmed by double digits today. Export optimism, dwindling domestic supplies and dry weather in South America have fueled the latest rally, with prices rising more than $1 per bushel so far this month. Corn prices also finished Monday’s session with moderate gains, as did most wheat contracts. Spillover strength from outside markets (i.e. financial, energy) lent additional support today.

A large portion of the Corn Belt could see another 1” or more total rainfall between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. But much drier weather is probable heading into December, per the agency’s 8-to-14-day outlook, covering November 30 through December 6. Seasonally warm weather is also likely for the Midwest and Plains during this time.

On Wall St., the Dow rose 232 points in afternoon trading to 29,495 on the heels of more positive coronavirus vaccine news. Late-stage trial data indicates Pfizer and Moderna are developing competing vaccines that are both around 95% effective. Energy prices also tilted higher, with crude oil up 1.25% this afternoon to move just under $43 per barrel. Diesel added 1.5%, meantime, with gasoline up more than 2%. The U.S. Dollar firmed slightly.

Last Friday, commodity funds were net buyers of corn (+3,500), soybeans (+7,000), soymeal (+1,500) and CBOT wheat (+2,500) contracts but were net sellers of soyoil (-1,500).

Corn

Corn prices rose around 1% higher Monday on a round of technical buying that was largely fueled by concerns over dry weather in South America and another large export sale reported earlier today. Spillover strength from soybeans lent additional aid. December futures closed up 3.5 cents to $4.2325, while March futures gained 5.25 cents to $4.3350.

Corn basis bids were steady to firm to start the week after rising 2 to 5 cents at three Midwestern locations today.

Private exporters announced to USDA the sale of 13.1 million bushels of corn for delivery to unknown destinations during the 2020/21 marketing year, which began September 1.

Corn export inspections slipped 0.9% lower week-over-week, to 32.8 million bushels. That was in the middle of trade estimates, which ranged between 27.6 million and 43.3 million bushels. Mexico was the top destination, with 11.6 million bushels. Cumulative totals for the 2020/21 marketing year are still well ahead of last year’s pace, with 364.2 million bushels since September 1.

European Union corn imports are down 17% year-over-year after reaching 265.7 million bushels through November 22, according to the latest available customs data.

The question every farmer wants to know right now is: How long will the latest rally last? “The truth is we don’t know, but we do know that it will end, as all bull runs do,” says Jim McCormick, hedging strategist with AgMarket.net. “We encourage producers to develop a game plan to be prepared for when the ‘top’ is put in.” McCormick elaborates in last Friday’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 380,091 contracts, trending higher than Friday’s final count of 357,303.

Soybeans

Soybean prices are at the highest levels since the summer of 2016 after another round of double-digit gains Monday. Prices have been moving steadily higher in recent weeks as U.S. stocks spill lower while exports remain strong. Dry weather in South America is creating additional tailwinds. Today, January futures rose 11 cents to $11.92 and March futures climbed 12 cents to $11.9325.

Soybean basis bids were narrowly mixed at two interior river terminals and held steady elsewhere across the central U.S. today.

Soybean export inspections dropped 19% below the prior week’s tally to 73.9 million bushels. Analysts were expecting a similar total, with trade guesses that ranged between 55.1 million and 91.9 million bushels. China took nearly 70% of the total, with 51.0 million bushels. Cumulative totals for the 2020/21 marketing year are maintaining a wide lead over last year’s pace, with 897.2 million bushels.

European Union soybean imports for the 2020/21 marketing year reached 206.5 million bushels through November 22, which is 2% above last year’s pace. EU soymeal imports are down 6%, year-over-year, with EU canola imports trailing last year’s pace by 19%.

Are you worried about price volatility this year? Fred Dietz, ag risk management advisor with Advance Trading, Inc., has four lessons he thinks farmers should consider. The first is: “Expect that prices will likely move much higher or much lower than what you think.” Dietz outlines more advice in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 210,829 contracts, falling below Friday’s final count of 268,020.

Wheat

Wheat prices were mixed but mostly higher Monday, with spillover strength from corn and soybeans triggering some technical buying. December Chicago SRW futures gained 6.25 cents to $5.9950, December Kansas City HRW futures picked up a penny to $5.5125, and December MGEX spring wheat futures eased 0.5 cents lower to $5.4350.

Wheat export inspections pushed 7% higher from a week ago to reach 13.2 million bushels. That was on the higher end of trade estimates, which ranged between 5.5 million and 14.7 million bushels. Mexico was the No. 1 destination, with 2.5 million bushels. Cumulative totals for the 2020/21 marketing year are fractionally ahead of last year’s pace, with 455.5 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to show a one-point improvement in winter wheat quality, moving to 47% rated in good-to-excellent condition through November 22.

European Union soft wheat exports for the 2020/21 marketing year are at 337.7 million bushels through November 22, which is trailing last year’s pace by 20%. EU barley exports are also down 11% year-over-year.

China sold another 26.0 million bushels of its state wheat reserves on auction late last week, which was 17.6% of the total available for sale. It was the third time this month that the country has released large amounts of wheat for domestic sale.

Tunisia issued an international tender to purchase 3.4 million bushels of soft wheat, 2.8 million bushels of durum wheat and 3.4 million bushels of animal feed barley, which closes November 24. The grain can be sourced from optional origins, with shipment starting in late December.

Pakistan purchased nearly 12.5 million bushels of wheat from optional origins in an international tender that recently closed. The grain is for arrival by the end of March.

Preliminary volume estimates were for 99,838 CBOT contracts, falling moderately below Friday’s final count of 122,991.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 429.75 423.5 426.5 3.5
21-Mar 435.75 430.25 433.25 5.25
Soybeans        
21-Jan 1200 1186 1191.5 11
21-Mar 1199.5 1187 1192.5 12
Soymeal                $/ton        
21-Jan 399.1 392.2 393 1
Soyoil                    cents/lb        
21-Jan 38.87 38.11 38.34 0.01
Wheat                    $/bushel        
20-Dec 604.75 595.75 598.75 6.25
21-Mar 610 601.5 604.5 5.25
KC Wheat        
20-Dec 557 549.5 551.25 1
21-Mar 566 559 560.5 1.25
MPLS Wheat        
20-Dec 550 541.75 542.5 -0.5
21-Mar 567.5 560.25 561 0.75
Live Cattle             cents/lb        
20-Dec 110.7 108.525 110.175 2.075
Feeder Cattle         cents/lb        
21-Mar 137.875 135.075 137.5 3.125
Lean Hogs             cents/lb        
21-Feb 68.35 65.05 67.225 1.875
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Dec 43.36 42.29 43.01 0.59
Diesel        
20-Dec 1.3121 1.2818 1.31 0.0237
Unleaded Gasoline   $/gallon        
20-Dec 1.2096 1.1773 1.205 0.0298
Natural Gas        
21-Jan 2.834 2.756 2.831 0.061
Ethanol Futures        
20-Dec 1.41 1.41 1.41 0.02
U.S. Dollar Index        
20-Dec 92.795 92 92.55 0.155
Gold                      $/ounce        
20-Dec 1875 1828 1832.1 -40.5
Copper        
20-Nov 3.279 3.2785 3.279 -0.0145
Fertilizer Swaps     (as of 11/20)  
DAP Tampa-index              361.0 0
DAP-New Orleans              395.7 2
Urea-New Orleans              262.4 14
Urea-Middle East              265.5 17
Urea-Black Sea              240.0 3
UAN (32%) New Orleans              132.3 0

 

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