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Afternoon Market Recap for Oct. 16, 2020

Corn fades but stays above $4.

Soybeans fall around 1% Friday, while most wheat contracts move higher

Grain prices were mixed but mostly lower Friday. Wheat contracts saw the most upside, with CBOT futures firming as much as 0.9% higher as dry weather concerns linger for some major overseas producers. Corn tilted slightly lower but managed to stay just above $4. Soybeans dropped around 1%, however, as traders shrugged off another large export sale announced this morning and engaged in a round of technical selling and profit-taking.

Most of the Corn Belt should see some measurable rain or snow between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. Some parts of southern Missouri and southern Illinois could gather as much as 1” during this time. NOAA’s 8-to-14-day outlook predicts seasonally wet weather for the eastern Corn Belt between October 23 and October 29, with colder-than-normal temperatures likely for the entire central U.S.

On Wall St., a batch of better-than-expected retail sales data for September helped the Dow climb 264 points higher in afternoon trading to 28,758. Energy futures saw another round of moderate cuts, meantime, with crude oil down slightly and holding just below $41 per barrel, while gasoline and diesel each dropped around 1% lower this afternoon. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of most grain contracts, including corn (+23,500), soybeans (+6,000), soymeal (+7,000) and CBOT wheat (+14,500) but were net sellers of soyoil (-6,000).

Corn

Corn prices tested modest gains Friday but faded as the session wore on, with spillover weakness from soybeans and harvest pressure setting the table for some technical selling. December futures slid 1.25 cents lower to $4.0250, with March futures dipping 0.75 cents to $4.0725.

Corn basis bids were steady to mixed across the central U.S. Friday, moving as much as 3 cents higher at an Illinois ethanol while falling as much as 5 cents lower at an Illinois river terminal today.

Private exporters reported to USDA the sale of 5.0 million bushels of corn for delivery to Mexico during the 2020/21 marketing year, which began September 1.

USDA reported that corn sales for the week ending October 8 fell 47% lower week-over-week and 63% below the prior four-week average to 25.8 million bushels. Analysts were generally expecting a bigger haul, with trade guesses that ranged between 23.6 million and 47.2 million bushels. Cumulative totals for the 2020/21 marketing year remain well ahead of last year’s pace, with 176.9 million bushels.

Corn export shipments slipped 5% below the prior four-week average to 32.1 million bushels. Mexico was the No. 1 destination, with 12.1 million bushels.

Earlier this week, the U.S. Energy Information Administration showed improved ethanol production for the week ending October 9, with a daily average of 937,000 barrels. That was up moderately from the prior week’s tally of 923,000 barrels per day but remains moderately below the average weekly volume in early spring before the coronavirus pandemic curtailed demand.

Ukraine’s 2020 corn harvest is 40% complete, according to the country’s economy ministry. Production has reached 393.7 million bushels across 5.436 million acres so far.

France’s corn harvest is progressing faster than a year ago, with FranceAgriMer reporting 64% completion as of October 12. That’s up from 49% from a week ago and well ahead of 2019’s pace of 32%.

South Korea remains a very active buyer of grain in recent weeks, with a feed association purchasing another 2.6 million bushels of animal feed corn, likely from South America, in an international tender that closed earlier today. The grain is for arrival by the end of March.

Preliminary volume estimates were for 348,860 contracts, dropping moderately below Thursday’s final count of 416,347.

Soybeans

Soybean prices eroded steadily throughout Friday’s session, closing with double-digit losses after a round of technical selling and profit-taking. Traders mostly shrugged off a large export sale to unknown destinations and mostly supportive sales data that USDA released this morning. November futures dropped 11.5 cents to $10.5075, with January futures down 11 cents to $10.51.

Soybean basis bids jumped as much as 10 cents higher at a Nebraska processor while sliding as much as 3 cents lower at an Illinois river terminal Friday. Farmer sales generally cooled today amid lower futures prices.

Private exporters reported to USDA the sale of 6.4 million bushels of soybeans for delivery to unknown destinations during the 2020/21 marketing year, which began September 1.

Soybean export sales dropped 74% from a week ago but remained 18% above the prior four-week average, with 96.7 million bushels. That tally exceeded all trade estimates, which ranged between 55.1 million and 80.8 million bushels. Cumulative totals for the 2020/21 marketing year are nearly double last year’s pace so far, with 331.4 million bushels.

Soybean export shipments firmed 21% above the prior four-week average, with 87.6 million bushels. China accounted for most of that total, with 64.1 million bushels.

Preliminary volume estimates were for 251,161 contracts, falling moderately below Thursday’s final count of 291,861.

Wheat

Wheat prices emerged from a choppy session Friday with small to moderate gains, as dry weather concerns triggered more technical buying. Some contracts reached highs not seen since late 2014. December Chicago SRW futures boosted 8.25 cents to $6.2650, December Kansas City HRW futures added a penny to $5.59, and December MGEX spring wheat futures picked up 0.5 cents to $5.5925.

Wheat export sales held steady from a week ago and moved 23% ahead of the prior four-week average, with 19.4 million bushels. That total was good enough to land on the high end of analyst estimates, which ranged between 7.3 million and 22.0 million bushels. Cumulative totals for the 2020/21 marketing year remain moderately higher year-over-year, with 367.3 million bushels.

Wheat export shipments dipped 15% below the prior four-week average, with 18.6 million bushels. China was the No. 1 destination, with 6.7 million bushels.

Ukraine has completed its 2020 wheat harvest, according to the country’s economy ministry. Total production reached 922.3 million bushels, which is 11.3% below 2019’s tally after some farmers battled severe drought this year.

France has planted 12% of its 2020/21 wheat crop through October 12, according to the country’s FranceAgriMer consultancy. That’s up from 6% last week and a bit behind 2019’s pace of 16%.

Pakistan is thought to have purchased 12.5 million bushels of wheat from optional origins in an international tender that closed Wednesday. The grain is for arrival by the end of January.

South Korea purchased 2.4 million bushels of feed wheat, likely sourced from the U.S., in a deal that closed earlier today. The grain is for shipment between mid-February and mid-March.

Preliminary volume estimates were for 131,322 CBOT contracts, slipping slightly below Thursday’s final count of 137,306.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 409 401.75 402 -1.25
21-Mar 412.25 406 407 -0.75
Soybeans        
20-Nov 1070.75 1048.75 1050 -11.5
21-Jan 1071 1049.5 1050.25 -11
Soymeal                $/ton        
20-Dec 369 361.5 362.1 -4.2
Soyoil                    cents/lb        
20-Dec 33.61 32.92 32.98 -0.15
Wheat                    $/bushel        
20-Dec 630.75 615.5 625.25 8.25
21-Mar 629.5 615.5 623.5 3.75
KC Wheat        
20-Dec 565.25 552 558.75 1
21-Mar 573.25 560.25 566.25 0
MPLS Wheat        
20-Dec 566 557 559.75 0.5
21-Mar 578 569.75 571.5 -1
Live Cattle             cents/lb        
20-Oct 107.8 106.85 107.5 -0.275
Feeder Cattle         cents/lb        
20-Nov 136.35 134.2 134.75 -1.725
Lean Hogs             cents/lb        
20-Dec 72 70.325 70.875 -0.55
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Nov 41.05 40.08 40.81 -0.15
Diesel        
20-Nov 1.19 1.1627 1.1762 -0.0125
Unleaded Gasoline   $/gallon        
20-Nov 1.1828 1.1422 1.1658 -0.0142
Natural Gas        
20-Dec 3.319 3.244 3.256 -0.005
Ethanol Futures        
20-Dec 1.41   1.415  
U.S. Dollar Index        
20-Dec 93.885 93.52 93.67 -0.194
Gold                      $/ounce        
20-Nov 1913.4 1898 1898.5 -4.7
Copper        
20-Oct 3.0635 3.0635 3.0635 -0.0195
Fertilizer Swaps     (as of 10/16)  
DAP Tampa-index              355.0 0
DAP-New Orleans              394.6 1
Urea-New Orleans              239.8 2
Urea-Middle East              258.0 -2
Urea-Black Sea              241.0 1
UAN (32%) New Orleans              132.3 0

 

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