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Afternoon Market Recap for Nov. 25, 2020

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Grains stumble on pre-holiday jitters.

Wheat suffers double-digit losses, with corn and soybeans also in the red

With grain markets closed on Thursday, traders took the opportunity today to slice prices lower after a round of technical selling and profit-taking. Wheat prices were hit the hardest, with some contracts falling nearly 4% lower today after news that Russia may export even more wheat this marketing year (the country is already the world’s No. 1 wheat exporter). Corn prices slid more than 1% lower, with soybeans down around 0.5%.

Aside from Indiana and Ohio, much of the central U.S. won’t see any more measurable rainfall between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally dry weather is likely for most of the country between December 2 and December 8, looking at NOAA’s latest 8-to-14-day outlook. Seasonally warm weather is also likely for the upper Midwest and Northern Plains during this time.

The latest rally on Wall St. took a short breather, with the Dow dropping 203 points in afternoon trading to 29,842, amid worse-than-expected employment data. Energy prices firmed moderately, in contrast, with crude oil up more than 1.5% to move back above $45 per barrel this afternoon. Diesel and gasoline each carved out gains of around 2%. The U.S. Dollar softened moderately.

On Tuesday, commodity funds were net sellers of corn (-10,000), soybeans (-2,500) and soyoil (-5,000) contracts but were net buyers of soymeal (+2,500) and CBOT wheat (+11,000).

Tomorrow, grain markets will be closed in observance of Thanksgiving. They will reopen Friday morning but close early (12:05 p.m. CST). Have a safe, happy holiday and tune in on Friday for our next round of fresh marketing news and analysis.

Corn

Corn prices tilted more than 1% lower Wednesday on a round of technical selling and profit-taking. Spillover weakness from struggling wheat prices applied additional headwinds. December futures lost 5.75 cents to $4.20, with March futures down 5.25 cents to $4.2725.

Corn basis bids were steady to firm Wednesday, rising 3 to 6 cents at two ethanol plants and picking up 2 cents at an Illinois river terminal today.

Ahead of the next weekly export sales report from USDA, out Friday morning, analyst expect the agency to show corn sales ranging between 31.5 million and 55.1 million bushels for the week ending November 19.

The latest batch of data from the U.S. Energy Information Administration showed ethanol production jumping to a daily average of 990,000 barrels for the week ending November 20, up from the prior week’s daily average of 962,000 barrels and threatening to top 1 million barrels per day for the first time since late March.

Ukraine’s 2020 corn harvest is nearing completion and could see a total production of around 1.181 billion bushels, according to deputy economy minister Taras Vysotskiy. If realized, that would be a 16% decline from 2019’s total. Ukraine has struggled through periods of drought this season, and total grain production could fall as much as 13% year-over-year.

Russian consultancy Sovecon downgraded its corn export estimates for 2020/21, lowering it to 153.5 million bushels. The country’s wheat export potential this marketing year is on the rise, in contrast.

Preliminary volume estimates were for 468,349 contracts, moving 8.5% ahead of Tuesday’s final count of 431,805.

Soybeans

Soybean prices faced downward pressure Wednesday on spillover weakness from corn and wheat, which spurred some technical selling today. Bullish supply and demand fundamentals are still holding strong, however, and prices remain near the highest levels since June 2016. January and March futures each dropped 7 cents to close at $11.8425 and $11.8625, respectively.

Soybean basis bids held steady across the Midwest Wednesday. Farmer sales have been generally slow this holiday week.

Ahead of Friday morning’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 25.7 million and 51.4 million bushels for the week ending November 19. Analysts also think USDA will report soymeal sales ranging between 100,000 and 300,000 metric tons, plus another 12,000 to 50,000 MT of soyoil sales.

Chinese imports of U.S. soybeans in October jumped 196% higher month-over-month to 124.9 million bushels as the country shored up its domestic needs and attempts to catch up on its phase-one trade deal commitments. China also purchased 155.5 million bushels of soybeans from Brazil last month, a 12% increase from September.

Preliminary volume estimates were for 170,327 contracts, tracking moderately below Tuesday’s final count of 227,203.

Wheat

Wheat prices tumbled substantially lower Wednesday on a wave of technical selling and profit-taking. Some additional pressure occurred after traders liquidated positions ahead of first notice day for deliveries on December contracts, which is coming up quickly next Monday. An uptick in expected Russian exports applied additional headwinds. December Chicago SRW futures tumbled 24 cents to $5.8725, December Kansas City HRW futures lost 18 cents to $5.43, and December MGEX spring wheat futures dropped 6.25 cents to $5.4450.

Ahead of Friday morning’s weekly export report from USDA, analysts anticipate wheat sales ranging between 7.3 million and 16.5 million bushels for the week ending November 19.

Russian consultancy Sovecon has more bullish expectations for the country’s 2020/21 wheat exports, raising its estimates by 36.7 million bushels to reach 1.499 billion bushels, based on higher production estimates and the current pace of exports. That puts Russia on pace for near-record wheat exports this marketing year, second only to 2017/18.

South Korea purchased 2.9 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain is for shipment between mid-February and the end of March.

Taiwan purchased 3.0 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain will be shipped from the U.S. Pacific Northwest coast between January and February.

Thailand purchased 2.2 million bushels of animal feed wheat and 3.6 million bushels of feed barley from optional origins in a tender that closed earlier today. The grain is for shipment between January and March.

Jordan passed on all offers for its international tender to buy 4.4 million bushels of milling wheat, which closed earlier today. The country has struggled to close similar deals this fall but is likely to issue another tender that will close around December 9.

Preliminary volume estimates were for 155,092 CBOT contracts, moving ahead of Tuesday’s final count of 128,310.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 427.5 420 420 -5.75
21-Mar 434.75 427.25 427.5 -5.25
Soybeans        
21-Jan 1198.5 1183.25 1184 -7
21-Mar 1200.25 1184.75 1185.75 -7
Soymeal                $/ton        
21-Jan 401.3 393.8 395.9 -0.1
Soyoil                    cents/lb        
21-Jan 38.28 37.66 37.86 0.16
Wheat                    $/bushel        
20-Dec 616.5 587 588.25 -24
21-Mar 622.75 595.25 596.5 -22
KC Wheat        
20-Dec 565 543 543.75 -18
21-Mar 575 549.75 550.5 -20.5
MPLS Wheat        
20-Dec 557.25 542.25 543.5 -6.25
21-Mar 573 561 561.5 -8
Live Cattle             cents/lb        
20-Dec 111.65 110.875 111.35 0.175
Feeder Cattle         cents/lb        
21-Mar 139.825 138.125 139.45 1.325
Lean Hogs             cents/lb        
21-Feb 67.85 66.525 67.825 1.075
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Dec 46.26 44.73 45.56 0.65
Diesel        
20-Dec 1.3987 1.3561 1.3816 0.0221
Unleaded Gasoline   $/gallon        
20-Dec 1.296 1.2564 1.2825 0.0243
Natural Gas        
21-Jan 3.002 2.838 2.943 0.043
Ethanol Futures        
20-Dec 1.38 1.31 1.37 -0.04
U.S. Dollar Index        
20-Dec 92.255 91.905 91.96 -0.26
Gold                      $/ounce        
20-Dec 1816.3 1798.6 1803.8 -1
Copper        
20-Nov 3.294 3.2925 3.293 -0.007
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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