Afternoon Market Recap for Oct. 27, 2020

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Grain prices stumble.

Corn, soybean and wheat futures all close with moderate losses Tuesday

Grain prices spilled into the red Tuesday, putting an ongoing rally on pause for a round of technical selling and profit taking that handed out moderate losses. Corn and soybean futures fell around 0.5%, with wheat futures losing as much as 0.75% today.

Plenty of wet weather is expected to make its way across the lower Midwest later this week, with widespread areas gathering another 2” or more between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency predicts drier-than-normal weather will follow in its latest 8-to-14-day outlook, which also calls for seasonally warm weather for the central U.S. between November 3 and 9.

On Wall St., investors remain skittish about the rising number of coronavirus cases, with the Dow falling another 142 points in afternoon trading to 27,542. But energy prices were on the mend this afternoon, with crude oil up 2.5% to move back over $39 per barrel as Tropical Storm Zeta approaches the U.S. coast. Gasoline and diesel saw similar gains today. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of soybeans (+4,500), soymeal (+2,500) and soyoil (+3,000) contracts but were net sellers of corn (-4,000) and CBOT wheat (-9,500).

Corn

Corn prices moved moderately lower Tuesday, eroding fairly steadily as the session wore on after some technical selling and profit-taking. Prices remain near 14-month highs, however. December futures dropped 2 cents to $4.1575, with March futures down 2.5 cents to $4.16.

Corn basis bids remain steady to firm across the central U.S. Tuesday, jumping as much as 15 cents higher at an Illinois processor today, although increases of 2 to 5 cents were much more common. An Indiana ethanol plant bucked the overall trend after falling 7 cents.

Corn harvest is now 72% complete through Sunday, up from 60% a week ago and well ahead of the prior five-year average of 56%. Analysts were expecting a slightly faster pace, with an average trade guess of 73%. Of the top 18 production states, only Michigan (34%), Ohio (32%) and Wisconsin (40%) have yet to reach the halfway point.

Is there a “perfect storm” brewing for U.S. corn exports? Larry Shonkwiler, senior agricultural economist with Advance Trading, Inc., says there are six factors swirling that could set the table for record high sales this marketing year. Click here to learn more in the latest Ag Marketing IQ blog.

What’s behind the bullish Chinese demand for U.S. corn right now? Farm Futures grain market analyst Jacquie Holland runs through some numbers and looks at the latest trends in her new Corn Outlook column – click here to read more.

The next batch of weekly ethanol production arrives tomorrow morning. Production has seen some moderate variance in the past month, ranging from a daily average of 887,000 barrels up to 937,000 barrels. Last week’s tally was near the middle of that range, with 913,000 daily barrels.

European Union corn imports for the 2020/21 marketing year are down 20% year-over-year so far after reaching 204.7 million bushels through October 25.

Ukraine’s corn harvest is 56% complete through October 26, per the country’s economy ministry, with a total production of 570.8 million bushels so far. The country’s 2020/21 corn exports are less than half of last year’s pace, meantime, with just 60.6 million bushels since July 1.

Two South Korean groups purchased a total of 10.6 million bushels of animal feed corn from optional origins in two international tenders that closed earlier today. The grain is for arrival starting in mid-February.

Iran issued an international tender to purchase 7.9 million bushels of animal feed corn that closes tomorrow. The grain is for shipment between November and January.

Taiwan purchased 2.6 million bushels of animal feed corn, likely sourced from the U.S., in an international tender that closed earlier today. The grain is for shipment between late January and mid-February.

Preliminary volume estimates were for 402,230 contracts, moving moderately above Monday’s final count of 361,421.

Soybeans

Soybean prices followed corn and wheat prices lower Tuesday, losing about 0.5% by the session’s close on some technical selling and profit-taking, although demand optimism kept losses minimized today. November futures fell 5.5 cents to $10.8225, with January futures dropping 7 cents to $10.7650.

Soybean basis bids were steady to firm Tuesday, rising 1 to 5 cents higher across half a dozen Midwestern locations today.

Soybean harvest is even further along, making it to 83%, although analysts expected USDA to report progress at 86%. Stat’s still well above the prior five-year average of 73%, however, and even more ahead of 2019’s pace of 57%. North Carolina (21%) is the only top-18 production state that hasn’t yet cleared the halfway mark.

European Union soybean imports for the 2020/21 marketing year (which began July 1) reached 164.2 million bushels through October 25, which is 4% higher than last year’s pace so far. But EU canola imports this marketing year are down 22%, meantime, with EU soymeal imports down 12%.

Preliminary volume estimates were for 314,700 contracts, trending 14% above Monday’s final count of 276,443.

Wheat

Wheat prices spilled moderately lower on a round of technical selling on reports of improving weather in Russia, the world’s No. 1 wheat exporter, along with worries over how rising coronavirus cases across the world might disrupt supply and demand. December Chicago SRW futures fell 4.5 cents to $6.1550, December Kansas City HRW futures dropped 3.5 cents to $5.4850, and December MGEX spring wheat futures also lost 3.5 cents to $5.6150.

The 2020/21 winter wheat crop is 85% planted, up from 77% a week earlier and moving ahead of the prior five-year average of 80%. And 62% of the crop is emerged, also coming in ahead of the prior five-year average of 60%.

USDA released its 2020/21 winter wheat quality ratings for the first time, too. Only 41% of the crop was rated in good-to-excellent condition, which was far below the average trade guess of 52% and last year’s initial rating of 56%. Another 40% was rated fair, with the remaining 19% rated poor or very poor.

European Union soft wheat exports reached 236.6 million bushels between July 1 and October 25, which is trending 30% lower year-over-year so far. EU barley exports are also down 14% from a year ago.

Ukraine’s 2020/21 wheat exports are down 7.3% year-over-year, but the country has still burned through 57% of its quotas after selling 371.1 million bushels since July 1. Ukraine’s government established the quota to protect domestic supplies in these uncertain times.

Preliminary volume estimates were for 99,730 CBOT contracts, falling slightly short of Monday’s final count of 109,410.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 422.25 415.5 416 -2
21-Mar 422.25 415.75 416.5 -2.5
Soybeans        
20-Nov 1094 1081.75 1082.25 -5.5
21-Jan 1088.5 1076.25 1076.5 -7
Soymeal                $/ton        
21-Jan 385 377.5 377.9 -5.5
Soyoil                    cents/lb        
21-Jan 34.42 33.84 33.92 -0.34
Wheat                    $/bushel        
20-Dec 627 614.75 615.75 -4.5
21-Mar 625.75 614.5 615.75 -5.25
KC Wheat        
20-Dec 560.5 547.75 549.25 -3.5
21-Mar 567 554.75 556.25 -4.25
MPLS Wheat        
20-Dec 568.75 558.75 561.5 -3.5
21-Mar 579.75 571.25 573.5 -1.75
Live Cattle             cents/lb        
20-Oct 105.025 104.075 105 1.025
Feeder Cattle         cents/lb        
20-Nov 133.075 130.675 132.475 1.9
Lean Hogs             cents/lb        
21-Feb 69.325 67.475 67.95 0.3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Dec 39.83 38.51 39.42 0.86
Diesel        
20-Nov 1.1615 1.1241 1.1558 0.034
Unleaded Gasoline   $/gallon        
20-Nov 1.1471 1.1116 1.1377 0.0261
Natural Gas        
20-Dec 3.336 3.18 3.305 0.052
Ethanol Futures        
20-Nov 1.559 1.55 1.55 -0.017
U.S. Dollar Index        
20-Dec 93.13 92.775 92.935 -0.109
Gold                      $/ounce        
20-Nov 1910.8 1898.4 1907.4 4.7
Copper        
20-Oct 3.088 3.088 3.088 -0.0005
Fertilizer Swaps     (as of 10/16)  
DAP Tampa-index              355.0 0
DAP-New Orleans              390.2 -4
Urea-New Orleans              237.6 -2
Urea-Middle East              255.5 -3
Urea-Black Sea              240.0 -1
UAN (32%) New Orleans              132.3 0

 

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