markets charts - green with red line phongphan5922/Thinkstock

Afternoon Market Recap for Oct. 21, 2020

Corn climbs higher.

Soybeans also finish with moderate gains, with wheat prices mixed Wednesday

Grain prices were mixed but mostly firm Wednesday. Export optimism continues to give corn and soybean prices a lift. Corn saw gains of more than 1%, with soybeans up around 0.75% today on another round of technical buying. Wheat contracts were mixed, meantime, with winter wheat suffering a small setback while spring wheat moved moderately higher.

This week is likely to conclude with some more rain and snow across the Midwest and Plains, with some areas gathering another 1” or more between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally dry, cool weather for most of the central U.S. between October 28 and November 3.

On Wall St., investors are showing light optimism as coronavirus stimulus talks continue. The Dow was up 21 points in afternoon trading to 28,330. Energy prices soured, in contrast, with crude oil spilling 4% lower on demand concerns to hover just above $40 per barrel. Gasoline also dropped around 4% this afternoon, with diesel down nearly 3%. The U.S. Dollar softened moderately.

On Tuesday, commodity funds were net buyers of all major grain contracts, including corn (+12,500), soybeans (+10,000), soyoil (+6,000) and CBOT wheat (+4,000).

Corn

Corn prices posted another round of solid gains Wednesday after a round of technical buying boosted prices by another 1% and closing at the highest levels since August 2019. Export optimism remains strong for now, and emerging dry conditions in South America could compromise yield potential in Brazil and Argentina. December futures rose 5.25 cents to $4.14, with March futures up 3.25 cents to $4.1650.

Corn basis bids were mostly steady to firm Wednesday, with bids jumping as much as 15 cents higher at an Indiana elevator. However, gains between 5 and 6 cents were much more common today.

Why is it so important to track basis? Matthew Kruse, president of Commstock Investments, shares his views in the latest Ag Marketing IQ blog – click here to learn more.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show corn sales ranging between 31.5 million and 55.1 million bushels for the week ending October 15, expressing confidence that actuals will surpass the prior week’s tally of 25.8 million bushels.

Bad weather is hampering corn harvest in some areas, although the nationwide pace is still well ahead of the prior five-year average. Farmers reporting to Feedback From The Field share their latest challenges – click here to read the latest round of farmer anecdotes and view our interactive map.

Grain traveling the nation’s railways jumped to 25,547 carloads last week, climbing 24% higher than a year ago. Cumulative totals for 2020 remain just behind 2019’s pace, meantime, at 902,062 carloads.

Preliminary volume estimates were for 410,417 contracts, climbing moderately ahead of Tuesday’s final count of 306,951.

Soybeans

Soybean prices also moved higher Wednesday on a round of technical buying fueled by export optimism and concerns about dry weather in South America, which has slowed planting progress there. Prices remain just below two-and-a-half year highs captured earlier this month. November and January futures each climbed 7.75 cents higher to close at $10.7175 and $10.7150, respectively.

Soybean basis bids were steady to firm Wednesday, rising 2 to 10 cents higher across a handful of Midwestern locations today. Strong crushing margins has kept processing demand high.

Prior to tomorrow morning’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 55.1 million and 91.9 million bushels for the week ending October 15. Actuals will need to surpass all trade guesses to match the prior week’s tally of 96.7 million bushels.

Analysts are also anticipating soymeal sales ranging between 100,000 and 350,000 metric tons last week, plus up to 30,000 MT of soyoil sales.

In the past month, soybean prices have rocketed past $10 per bushels and are now tantalizingly close to $11 per bushels. What else will be needed for prices to clear that next benchmark? We walked through some scenarios in the latest Midweek Markets podcast – click here to listen.

Preliminary volume estimates were for 272,077 contracts, moving moderately above Tuesday’s final count of 236,620.

Wheat

Wheat prices were mixed Wednesday amid an uneven round of technical maneuvering, although plenty of bullish fundamentals are still in play, including drought challenges, export demand and more. Today, December futures dropped 2.75 cents to $6.2925, December Kansas City HRW futures dipped 0.5 cents to $5.7050, and December MGEX spring wheat futures added 6 cents to $5.8375.

Ahead of tomorrow morning’s weekly export report from USDA, analysts offered up a broad range of guesses for wheat sales for the week ending October 15 – from a low end of 7.3 million bushels all the way up to 29.4 million bushels.

Argentina has received some much-needed rains recently, but its 2020/21 wheat production potential is still in doubt, with satellite imagery suggesting a haul of around 654 million bushels.

Ukraine has used up nearly 57% of its 2020/21 wheat export quota after shipping around 365 million bushels abroad since the first of July. Grain traders and the Ukrainian government agreed earlier to limit wheat exports to 643 million bushels this marketing year.

Taiwan issued an international tender to purchase 3.3 million bushels of grade 1 milling wheat from the United States, which closes on Friday. The grain is for shipment between December and January.

Jordan passed on its international tender to buy 4.4 million bushels of milling wheat that closed earlier today. The country has struggled to close similar deals in recent months despite issuing semi-regular tenders to purchase both wheat and barley.

Tunisia issued an international tender to purchase 1.8 million bushels of soft milling wheat from optional origins, which closes Thursday. The grain is for shipment between November and December.

Preliminary volume estimates were for 110,603 CBOT contracts, falling short of Tuesday’s final count of 128,830.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 415.25 407.75 413.75 5.25
21-Mar 418.5 412 416.75 3.25
Soybeans        
20-Nov 1077 1064.25 1072 7.75
21-Jan 1076.5 1063.75 1071.5 7.75
Soymeal                $/ton        
21-Jan 374 366.7 373 6.7
Soyoil                    cents/lb        
21-Jan 33.81 33.07 33.15 -0.17
Wheat                    $/bushel        
20-Dec 637.5 628.75 629.75 -2.75
21-Mar 637.75 630 631.25 -1.5
KC Wheat        
20-Dec 579.5 568.25 569.75 -0.5
21-Mar 586 575.5 577 -0.25
MPLS Wheat        
20-Dec 587.75 576.75 582.5 6
21-Mar 596.75 586.5 591.25 4
Live Cattle             cents/lb        
20-Oct 104.7 103.25 103.75 -0.375
Feeder Cattle         cents/lb        
20-Nov 132.025 130.75 131.375 0.6
Lean Hogs             cents/lb        
21-Feb 70.2 67.95 68.35 -0.925
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Nov 41.59 39.78 40.14 -1.56
Diesel        
20-Nov 1.1715 1.1267 1.1405 -0.033
Unleaded Gasoline   $/gallon        
20-Nov 1.1852 1.1308 1.1406 -0.0473
Natural Gas        
20-Dec 3.362 3.253 3.343 0.083
Ethanol Futures        
20-Nov 1.55 1.51 1.52 0.051
U.S. Dollar Index        
20-Dec 93.06 92.46 92.585 -0.466
Gold                      $/ounce        
20-Nov 1932 1908.5 1923.7 13.3
Copper        
20-Oct 3.1955 3.1885 3.1885 0.045
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

 

Get our top content delivered right to you inbox every day. Click here to subscribe to our morning and afternoon market newsletters.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish