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Afternoon Market Recap for November 29, 2021

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Grains spill back into the red.

Corn, soybeans and wheat all suffer moderate losses Monday

From weekend rains in South America to bumper crops predicted for Australia, weather around the world ginned up some bearish sentiment that pushed grain prices lower on Monday. Wheat prices saw the most downside overall, with some contracts losing more than 2% today. Corn and soybeans suffered moderate losses, and soy crushing margins tumbled 7% lower.

Some light rains and snows could fall on parts of the eastern Corn Belt and Great Lakes region between Tuesday and Friday, but very few areas will gather much more than 0.25” during this time, per NOAA’s latest 72-hour cumulative precipitation map. The agency’s new 8-to-14-day outlook predicts warmer-than-normal conditions for almost the entire country between December 6 and December 12, with seasonally dry weather likely for the Plains next week.

On Wall St., the Dow improved 311 points in afternoon trading to 35,211, rebounding from heavy losses from last Friday’s selloff. A new Covid variant may is not worrisome to trigger any economic lockdowns for now, according to the Biden Administration. Energy futures also significantly firmed, with crude oil up 3% in afternoon trading to move back above $70 per barrel. Gasoline and diesel also rose more than 3%. The U.S. Dollar firmed moderately.

Last Friday, commodity funds were net buyers of corn (+1,000) contracts but were net sellers of soybeans (-12,000), soymeal (-2,000), soyoil (-9,000) and CBOT wheat (-9,000).

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Corn

Corn prices faded on some technical selling and profit-taking on favorable South American forecasts and spillover weakness from other grains. December futures dropped 4.75 cents to $5.82, with March futures falling 8.75 cents to $5.83.

Corn basis bids were mostly steady to start the week but did tilt 4 to 10 cents lower at two Midwestern processors while firming 3 cents at an Illinois ethanol plant today.

Corn export inspections came in at 30.2 million bushels this past week. That was toward the lower end of trade estimates, which ranged between 22.6 million and 47.2 million bushels. Mexico was the No. 1 destination, with 12.9 million bushels. Cumulative totals for the 2021/22 marketing year are still lagging moderately behind last year’s pace, with 337.8 million bushels.

Preliminary volume estimates were for 445,948 contracts, moving moderately above Friday’s final count of 385,148.

Soybeans

Soybean prices suffered a double-digit drop, falling around 0.8% lower after a round of technical selling to start the week. Worries over record-breaking South American production this season and spillover weakness from corn and wheat were partly to blame. January futures fell 10.5 cents to $12.4225, while March futures lost 10.25 cents to $12.5275.

Soybean basis bids remained steady across the central U.S. on Monday.

Soybean export inspections saw a 12% decline from a week ago, sliding to 78.7 million bushels. That was still above the entire range of trade estimates, which came in between 36.7 million and 73.5 million bushels. China was by far the No. 1 destination, with 50.9 million bushels. Cumulative totals for the 2021/22 marketing year are still trending well below last year’s pace, with 776.1 million bushels.

With waning demand from China and a potential record-breaking Brazilian crop underway, are the prospects for 2021/22 U.S. soybean exports looking a bit more bearish? Larry Shonkwiler, senior agricultural economist with Advance Trading, takes a closer look in today’s Ag Marketing IQ blog – click here for details.

Speaking of Brazil, planting in the country’s top production state of Mato Grosso is nearly complete, with reports of “good emergence” and “good rains,” according to Julio Bravo, CEO of agribusiness group AgroBravo. Some weather-related hang-ups are still possible later in the season, meantime. Learn more by catching up on the latest South American Crop Watch blog.

Preliminary volume estimates were for 136,343 contracts, easing slightly below Friday’s final count of 144,199.

Wheat

Wheat prices stumbled as new reports from Australia are anticipating a record-breaking harvest down under. A strengthening U.S. Dollar and spillover weakness from other grain prices applied additional headwinds today. December Chicago SRW futures tumbled 18.5 cents to $8.07, December Kansas City HRW futures dropped 11.75 cents to $8.5325, and December MGEX spring wheat futures eased 1.5 cents to $10.38.

Wheat export inspections improved 30% week-over-week to reach 9.2 million bushels. That was still slightly toward the lower end of trade guesses, which ranged between 6.4 million and 14.7 million bushels. The Philippines led all destinations, with 4.3 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 395.1 million bushels.

USDA may not release any additional harvest updates for corn and soybeans in its next crop progress report, out later today and covering the week through November 28. But the agency will still provide fresh data on winter wheat quality ratings. Analysts expect to see crop quality degrade a point lower from a week ago, with 43% rated in good-to-excellent condition through Sunday.

Russia’s Sovecon consultancy estimates that the country’s wheat exports in November will come in around 117.6 million bushels, which would be mostly level with October’s tally, if realized. Russia is the world’s No. 1 wheat exporter.

Australia’s chief commodity forecaster expects to see record wheat production this season, with a new projection of 1.264 billion bushels. There are some lingering concerns bout crop quality, however, following heavy rains in some key production regions earlier this month.

Ahead of a Statistics Canada report out Friday morning, analysts expect to see 2021 Canadian all-wheat production estimates at just under 779 million bushels. That would be a year-over-year decrease of 40%, if realized. Widespread drought dropped total production to the lowest levels in more than a decade.

Preliminary volume estimates were for 114,890 CBOT contracts, trending higher than Friday’s final count of 91,487.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                   cents/bu    
21-Dec 588.25 576.5 581 -4.75
22-Mar 594 579 582.25 -8.75
Soybeans        
22-Jan 1268.5 1240.75 1241.5 -10.5
22-Mar 1278.75 1251.25 1252 -10.25
Soymeal                $/ton        
22-Jan 355.3 342.2 342.7 -7.1
Soyoil                    cents/lb        
22-Jan 60.25 58.2 58.28 -0.6
Wheat                    $/bushel        
21-Dec 840.5 805 807.5 -18.5
22-Mar 855.25 818.75 822.25 -18
KC Wheat        
21-Dec 881.75 847.5 854 -11.75
22-Mar 885 850.25 857.25 -12.25
MPLS Wheat        
21-Dec 1055 1027.5 1042.25 -1.5
22-Mar 1065 1037 1045.25 -2.5
Live Cattle             cents/lb        
21-Dec 139.125 136.625 136.95 -1.15
Feeder Cattle         cents/lb        
22-Mar 169.075 165.975 166.625 -1.35
Lean Hogs             cents/lb        
22-Feb 82.025 80.75 80.825 -0.2
Crude Oil  $/barrel *Energy prices may not represent final settlements      
22-Jan 72.93 68.86 69.21 1.06
Diesel        
21-Dec 2.23 2.0945 2.1337 0.0392
Unleaded Gasoline   $/gallon        
21-Dec 2.1631 2.0545 2.0641 0.0347
Natural Gas        
22-Feb 5.135 4.734 4.762 -0.602
Ethanol Futures        
22-Jan        
U.S. Dollar Index        
21-Dec 96.45 96.145 96.31 0.206
Gold                      $/ounce        
22-Jan 1800.2 1781.1 1782.8 -2.7
Copper        
21-Dec 4.375 4.2815 4.3395 0.056
Fertilizer Swaps     (as of 11/26)  
DAP Tampa-index              810.0 70
DAP-New Orleans              821.2 17
Urea-New Orleans              890.1 -1
Urea-Middle East              945.0 0
Urea-Black Sea              910.0 0
UAN (32%) New Orleans              617.3 0

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