Afternoon Market Recap for Nov. 24, 2020

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Wheat grabs double-digit gains.

Soybeans make small inroads, with corn down fractionally on Tuesday

Grain prices finished Tuesday’s session mixed but mostly higher. Wheat was the clear winner today after lower-than-expected crop quality ratings triggered a round of technical buying that pushed some contracts 2% higher. Soybeans started the session in the red but overcame those overnight losses to finish modestly higher today. Corn prices eased slightly lower on some technical selling and profit-taking, meantime.

Large portions of the eastern Corn Belt could gather another 0.75” to 1” of additional rainfall between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook predicts warmer-than-normal temperatures for much of the Midwest and Plains during the first week of December, with widespread seasonally dry weather during that time.

On Wall St., the Dow rallied another 380 points in afternoon trading to reach 29,972 and surpassed 30,000 points earlier today. Investors remain confident about the latest round of coronavirus vaccine news, as well as steps toward a peaceful transition to the upcoming Biden Administration. Energy prices jumped significantly higher, with crude oil up more than 4% this afternoon to approach $45 per barrel. Gasoline also gained more than 4% today, with diesel rising 3.7% higher in afternoon trading. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of all major grain contracts, including corn (+12,000), soybeans (+8,000), soymeal (+1,000), soyoil (+1,000) and CBOT wheat (+4,500).

Corn

Corn prices eased slightly on some technical selling and profit-taking, but losses were minimized by bullish supply and demand fundamentals that remain in place for now. December and March futures each dipped 0.75 cents lower to close at $4.2575 and $4.3250, respectively.

Corn basis bids moved 2 to 5 cents higher at three Midwestern locations Tuesday while holding steady elsewhere across the central U.S. today.

Turkey made provisional purchases of 13.8 million bushels of corn in an international tender that closed earlier today. The grain is for shipment in December and January.

President-elect Joe Biden’s transition team for the EPA could be cause for some concern, according to Farm Futures policy editor Jacqui Fatka, who walks through potential issues with ethanol, water rights, pesticide reviews and more in her latest DC Dialogue blog – click here to learn more.

Meantime, there’s still plenty of speculation on who Biden will tap to head the U.S. Department of Agriculture. Former North Dakota Sen. Heidi Heitkamp, Rep. Marcia Fudge of Ohio and Russell Redding, Pennsylvania agriculture commissioner, may be the current frontrunners, but other names have also been floated as potential candidates. Click here to learn more.

Preliminary volume estimates were for 434,881 contracts, climbing 14% above Monday’s final count of 379,919.

Soybeans

Soybean prices started Tuesday’s session with moderate overnight losses but erased those and closed slightly in the green today, as the current bullish supply and demand climate is hard for traders to ignore. January futures picked up 2.5 cents to $11.94, while March futures added 3.5 cents to $11.96.

Soybean basis bids tracked 3 cents higher at an Ohio elevator on Tuesday while holding steady elsewhere across the Midwest today.

China may not meet its phase-one trade goal commitments, but the country is still poised to be the top U.S. agricultural export market in the current fiscal year. China could buy a record $27 billion worth of farm-related goods from the U.S. between October 1, 2019 and September 30, 2020 – $8.5 billion more than USDA had projected in August.

Fertilizer and fuel costs are still near the lowest levels in a decade, notes grain market analyst Bryce Knorr. But that trend may reverse in the near future: “While energy costs should stay affordable over the next year, rising optimism over the post-pandemic economy, not to mention higher grain prices, are already increasing fertilizer costs,” he says. Knorr does some trendspotting in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 210,879 contracts, trending slightly higher than Monday’s final count of 207,689.

Wheat

Wheat prices jumped noticeably higher Tuesday after USDA reported sharply lower crop quality ratings late Monday afternoon. That triggered a round of technical buying that helped contracts move 1.5% to 2% higher today. December Chicago SRW futures climbed 12.25 cents to $6.11, December Kansas City HRW futures rose 10.25 cents to $5.6150, and December MGEX spring wheat futures added 8.5 cents to $5.51.

USDA reported yesterday afternoon that 89% of the 2020/21 winter wheat crop is now emerged through November 22, up from 85% a week earlier and just ahead of the prior five-year average of 88%.

Crop quality moved unexpectedly lower, with 43% now rated in good-to-excellent condition. That’s three points lower from a week ago, despite analysts predicting quality would move a point higher. Another 36% of the crop is rated fair (unchanged from last week), with the remaining 21% rated poor or very poor (up three points from last week).

Ukraine has used up two-thirds of its wheat export quotas, with the 2020/21 marketing year not ending until the end of next June. That’s a volume of 427.3 million bushels so far. Ukraine accounts for approximately 16% of the world’s total grain exports.

Tunisia purchased 3.4 million bushels of soft wheat and 2.8 million bushels of durum wheat from optional origins in an international tender that closed earlier today. The grain is for shipment between late December and late January, depending on origin.

South Korea issued an international tender to purchase nearly 3.0 million bushels of milling wheat from the United States, which closes on Wednesday. The grain is for shipment in February and March.

Thailand issued an international tender to purchase 5.9 million bushels of animal feed wheat, which closes on Wednesday. The grain is for shipment between January and March.

Preliminary volume estimates were for 128,420 CBOT contracts, moving ahead of Monday’s final count of 106,911.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 426.5 416.5 425.75 -0.75
21-Mar 433.5 423.25 432.5 -0.75
Soybeans        
21-Jan 1194 1174 1191.25 2.5
21-Mar 1196 1175.75 1193.25 3.5
Soymeal                $/ton        
21-Jan 397.9 390.8 396.9 4.7
Soyoil                    cents/lb        
21-Jan 38.44 37.27 37.72 -0.37
Wheat                    $/bushel        
20-Dec 612.25 594 611.25 12.25
21-Mar 618.5 599 617.5 12.75
KC Wheat        
20-Dec 562 545 561 10.25
21-Mar 572 554 570.75 10.25
MPLS Wheat        
20-Dec 551 540.5 550.75 8.5
21-Mar 570.25 558.5 569.75 7.75
Live Cattle             cents/lb        
20-Dec 111.675 109.95 111.35 1.35
Feeder Cattle         cents/lb        
21-Mar 139.05 137.5 138.625 1.35
Lean Hogs             cents/lb        
21-Feb 67.625 66 66.825 -0.3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Dec 45.2 42.82 44.85 1.79
Diesel        
20-Dec 1.3756 1.3064 1.359 0.0485
Unleaded Gasoline   $/gallon        
20-Dec 1.2696 1.2012 1.2555 0.0515
Natural Gas        
21-Jan 2.908 2.8 2.887 0.064
Ethanol Futures        
20-Dec 1.41 1.41 1.41 0
U.S. Dollar Index        
20-Dec 92.555 92.12 92.235 -0.259
Gold                      $/ounce        
20-Dec 1836.9 1797.1 1801.3 -36.5
Copper        
20-Nov 3.307 3.2935 3.305 0.0455
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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