Afternoon Market Recap for Nov. 30, 2020

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International competition slashes U.S. prices.

Better weather and export prospects overseas pushes corn, soybeans and wheat lower

Dry weather in South America has been a big driver in higher prices recently, but fresh forecasts calling for wetter weather spoiled soybean prices today, falling nearly 2% lower on a round of technical selling. Wheat suffered even bigger losses, with some contracts dropping more than 3% on reports of improved yields in Australia and bigger exports in Russia. Corn had some better fundamental news, including two new large export sales reported this morning, but still followed other grain prices lower on the ensuing spillover weakness.

The weather is trending drier moving forward than it had been earlier this month, with little or no rain or snow expected across large portions of the central U.S. between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. Drier-than-normal weather is also likely next week, per NOAA’s 8-to-14-day outlook, with the Plains likely to see some seasonally warm weather between December 7 and December 13.

On Wall St., the Dow spilled 336 points lower in afternoon trading to 29,573 after energy and financial stocks turned in poor performances today. Energy futures also trended lower, with crude oil dropping 1.5% this afternoon to fall back below $45 per barrel. Diesel dropped nearly 2%, with gasoline down more than 2.5%. The U.S. Dollar firmed slightly.

On Friday, commodity funds were net buyers of all major grain contracts, including corn (+17,500), soybeans (+7,000), soymeal (+1,000), soyoil (+4,500) and CBOT wheat (+7,000).

Corn

Corn prices fell more than 1% lower Monday on a round of technical selling largely spurred by spillover weakness from soybeans and wheat. A mostly positive round of export inspection data, plus the announcement of two new large export sales, were not enough to reverse course. December futures dropped 5.5 cents to $4.20, with March futures down 7.25 cents to $4.2650.

Corn basis bids were mostly steady to start the week across the central U.S. but did spill 11 cents lower at an Illinois ethanol plant today. Farmer sales have been generally slow following the Thanksgiving holiday and some recent downward price pressure.

Private exporters announced two more large corn sales to USDA this morning. Both sales are for delivery to unknown destinations during the 2020/21 marketing year, which began September 1. The first is for 5.5 million bushels, and the second is for 8.0 million bushels.

Corn export inspections moved moderately higher for the week ending November 26, reaching 35.0 million bushels. That tally was on the higher end of trade estimates, which ranged between 27.6 million and 39.4 million bushels. China was the No. 1 destination, with 13.4 million bushels. Cumulative totals for the 2020/21 marketing year are well ahead of last year’s pace, with 399.2 million bushels.

European Union corn imports are down 23% year-over-year after reaching 269.7 million bushels through November 25.

Preliminary volume estimates were for 332,941 contracts, trending moderately higher than Friday’s final count of 243,025.

Soybean

Soybean prices took a big step back on news of improving (read: wetter) forecasts for South America, which led to double-digit losses after a round of technical selling. Spillover weakness from wheat applied additional downward pressure today. January and March futures each tumbled 23 cents lower to close at $11.6875 and $11.6975, respectively.

Soybean basis bids held steady across the Midwest Monday, with many farmer sales likely put on pause today after futures suffered double-digit cuts.

Soybean export inspections moved slightly lower for the week ending November 26, to 74.8 million bushels. That was in the middle of trade guesses, which ranged between 66.1 million and 80.8 million bushels. China accounted for the majority of that total, with 61.2 million bushels. Cumulative totals for the 2020/21 marketing year remain well above last year’s pace, with 980.3 million bushels.

European Union soybean imports so far in the 2020/21 marketing season have reached 213.5 million bushels through November 25, which is tracking fractionally below last year’s pace. EU soymeal imports are down nearly 10% year-over-year, with EU canola imports dropping 19% from a year ago.

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Preliminary volume estimates were for 245,386 contracts, jumping well above Friday’s anemic count of 92,029.

Wheat

Wheat prices dropped sharply in Monday’s session after Australia significantly revised its production estimates higher, and after Russia significantly increased its export quotas for the remainder of the 2020/21 marketing year. December Chicago SRW futures fell 16.25 cents to $5.8025, December Kansas City HRW futures dropped 15.5 cents to $5.46, and December MGEX spring wheat futures lost 13 cents to $5.3775.

Wheat export inspections moved moderately higher for the week ending November 26, to 18.5 million bushels. That was on the upper end of trade estimates, which ranged between 11.0 million and 22.0 million bushels. The Philippines led all destinations, with 4.3 million bushels. Cumulative totals for the 2020/21 marketing year are slightly ahead of last year’s pace, with 474.1 million bushels.

Ahead of the next weekly crop progress report from USDA, out later this afternoon, analysts expect the agency to hold winter wheat quality ratings steady, with 43% of the crop rated in good-to-excellent condition through November 29. Individual trade guesses ranged between 42% and 45%.

European soft wheat exports for the 2020/21 marketing year reached 342.5 million bushels through November 25, trailing last year’s pace by 24% so far. EU barley exports are also down 15% year-over-year.

Russia exported an estimated 158 million bushels of wheat in November, which is a hair above October totals but moderately behind September’s tally, if realized. The country also might increase its export quota for the period between February 14 and June 30 by another 92 million bushels, for a new total of 643 million bushels. Russia is the world’s No. 1 wheat exporter.

Australia has received favorable rains so far this season and is expecting a major rebound in its 2020/21 wheat crop, with the country’s Bureau of Agricultural and Resource Economics (ABARES) now predicting production will reach 1.145 billion bushels. The country’s total winter grain production is on pace to become the second-best on record.

Turkey issued an international tender to purchase 14.7 million bushels of milling wheat that closes December 4. The grain is for shipment in January.

Preliminary volume estimates were for 132,687 CBOT contracts, which was moderately higher than Friday’s final count of 104,912.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 430.5 418.25 419.75 -5.5
21-Mar 439.5 424.25 426 -7.25
Soybeans        
21-Jan 1199 1168 1168.5 -23
21-Mar 1199.75 1169 1169.5 -23
Soymeal                $/ton        
21-Jan 399.9 389.8 390.5 -5.8
Soyoil                    cents/lb        
21-Jan 38.65 37.41 37.49 -0.87
Wheat                    $/bushel        
20-Dec 600 579.5 580.25 -16.25
21-Mar 609.25 584.25 585 -19.75
KC Wheat        
20-Dec 559.5 545.5 545.75 -15.5
21-Mar 567.75 546 547 -17.25
MPLS Wheat        
20-Dec 548.25 537.75 534.5 -13
21-Mar 569.75 552.5 553 -16.25
Live Cattle             cents/lb        
20-Dec 110.55 109.8 110.125 -0.5
Feeder Cattle         cents/lb        
21-Mar 140.075 138 139.925 0.925
Lean Hogs             cents/lb        
21-Feb 68.775 67.15 68.625 1.375
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jan 45.8 44.42 45.46 -0.07
Diesel        
20-Dec 1.3793 1.35 1.3683 -0.0122
Unleaded Gasoline   $/gallon        
20-Dec 1.282 1.2445 1.2559 -0.0261
Natural Gas        
21-Feb 2.977 2.813 2.924 0.092
Ethanol Futures        
21-Jan 1.3   1.35  
U.S. Dollar Index        
20-Dec 91.91 91.49 91.875 0.074
Gold                      $/ounce        
21-Jan 1789.9 1764.9 1778.9 -3
Copper        
20-Dec 3.4845 3.405 3.4315 0.032
Fertilizer Swaps     (as of 11/27)  
DAP Tampa-index              264.0 3
DAP-New Orleans              407.9 12
Urea-New Orleans              270.6 8
Urea-Middle East              280.0 15
Urea-Black Sea              247.5 8
UAN (32%) New Orleans              132.3 0

 

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