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Afternoon Market Recap for October 19, 2021

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Soybeans continue to move higher.

Wheat also firms in Tuesday’s session, while corn eases slightly

Grain prices were mixed but mostly higher today. Soybeans and spring wheat led the charge, each moving around 0.75% higher after some technical buying today. Winter wheat contracts also made small inroads. Corn prices tested moderate gains this morning but ultimately spilled slightly into the red by the close.

Apart from South Dakota, southern Minnesota and central Wisconsin, the central U.S. will see very little or no additional rainfall between Wednesday and Saturday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally warm weather for the central U.S. between October 26 and November 1, with a return to seasonally wet weather for the Midwest and Plains during this time.

On Wall St., the Dow tilted 128 points higher in afternoon trading to 35,387, anchored by strong performances from key retailers like Walmart and others. Energy futures were mixed. Crude oil trended another 1% higher to crest above $83 per barrel. Diesel was also up around 0.5%, while gasoline saw small losses this afternoon. The U.S. Dollar softened moderately.

On Monday, commodity funds were net buyers of all major grain contracts, including corn (+7,000), soybeans (+3,000), soymeal (+2,000), soyoil (+3,500) and CBOT wheat (+1,500).

Corn

Corn prices failed to hold onto meager overnight gains on Tuesday after pushing through a choppy session and closing with losses of around 0.5%. Traders will have more solid data to consider later this week, including updates to ethanol production (Wednesday) and export sales (Thursday). December futures dropped 2.75 cents to $5.30, with March futures down 1.5 cents to $5.39.

Corn basis bids were steady to mixed on Tuesday, moving as much as 5 cents higher at an Iowa processor while falling as much as 5 cents lower at an Illinois river terminal today.

This year’s corn harvest is now 52% complete through October 17, according to yesterday afternoon’s crop progress report from USDA. Analysts were expecting to see that number at 54%. It’s also moderately behind 2020’s pace of 57% but still well ahead of the prior five-year average of 41%. Almost all (97%) of the crop is now fully mature.

Corn quality ratings held steady, as analysts predicted, with 60% of the crop in good-to-excellent condition. Another 26% is rated fair (up a point from last week), with the remaining 14% rated poor or very poor (down a point from last week).

Per the latest data from the European Commission, EU corn imports in 2021/22 are trending 21% lower year-over-year, with 154.3 million bushels through October 17.

Brazil’s Anec estimates that the country’s corn exports will reach 91.1 million bushels this month, which is 18% higher than its prior projection made a week ago.

You may have heard the phrase, “Past performance is not indicative of future results.” That seems to be the case when looking for clues about whether corn prices tend to shift higher or lower between October and January, according to recent analysis from grain market analyst Bryce Knorr. Prices have moved higher around 55% of the time since 1965 – “not frequently enough to be statistically significant,” he points out. Learn what methods Knorr leans on to make his own predictions in today’s Ag Marketing IQ blog.

Preliminary volume estimates were for 161,312 contracts, tracking slightly lower than Monday’s final count of 174,073.

Soybeans

Soybean prices continued to make some positive forward momentum on Tuesday as export optimism triggered another round of technical buying today. November futures gained 7.25 cents to $12.2875, with January futures up 8.5 cents to $12.3750.

Soybean basis bids were steady to mixed across the central U.S. Tuesday, especially at interior river terminals, which shifted 10 cents lower at one location while firming 6 cents higher at another.

Soybean harvest moved from 49% a week ago up to 60% through October 17, per the latest crop progress data from USDA. That was two points below the average trade guess but still five points ahead of the prior five-year average. Nearly all (95%) of the crop is now dropping leaves, which mirrors the prior five-year average. With more than half the crop now harvested, USDA is no longer tracking quality ratings. A week ago, the agency marked 59% of the crop in good-to-excellent condition.

Brazil’s Anec expects to see soybean exports reach 124.8 million bushels this month, which is a 14% increase from its prior projection, made last week.

European Union soybean imports in 2021/22 moved to 133 million bushels through October 17, which is moderately below the prior year’s pace so far. EU soymeal imports are also down year-over-year, with 4.38 million metric tons.

Preliminary volume estimates were for 247,583 contracts, trending moderately above Monday’s final count of 173,485.

Wheat

Wheat prices made small to moderate inroads after some technical buying Tuesday. Spillover strength from outside markets lent some support today, as did a weaker U.S. Dollar. December Chicago SRW futures added 2.25 cents to $7.3850, December Kansas City HRW futures picked up 1.25 cents to $7.5025, and December MGEX spring wheat futures gained 7.25 cents to $9.75.

Winter wheat planting progress is 60% complete through Sunday, up from 47% a week earlier and identical to the prior five-year average. And 31% of the crop is emerged, versus 19% a week ago and the prior five-year average of 35%.

European Union soft wheat exports during the 2021/22 marketing season are trending 31% higher year-over-year so far after reaching 318.6 million bushels through October 17. EU barley exports are trending slightly higher year-over-year, with 125.8 million bushels.

Ukraine’s winter wheat planting progress has reached 75% through October 18, per the country’s agriculture ministry. Planted area is expected to come in around 16.507 million acres, which will be a year-over-year increase of 9.5%, if realized. Ukraine is one of the world’s leading wheat exporters, and is coming off what will likely be a record-breaking grain harvest this year.

Japan issued a regular tender to purchase 3.0 million bushels of food-quality wheat from the United States and Canada that closes on Thursday. Of the total, 36% is expected to be sourced from the U.S. The grain is for arrival by the end of January.

Preliminary volume estimates were for 46,640 CBOT contracts, slipping slightly below Monday’s final count of 51,941.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 537 529.5 530.25 -2.75
22-Mar 544.75 537.75 539 -1.5
Soybeans        
21-Nov 1239.25 1216.25 1228 7.25
22-Jan 1247.25 1224.75 1237 8.5
Soymeal                $/ton        
22-Jan 326.2 317.1 322.4 4.5
Soyoil                    cents/lb        
22-Jan 62.15 61.05 62.02 0.23
Wheat                    $/bushel        
21-Dec 745.25 735.25 736 2.25
22-Mar 757.25 747.5 748.5 1.75
KC Wheat        
21-Dec 757.25 745.25 748.25 1.25
22-Mar 764 752 755.25 1.5
MPLS Wheat        
21-Dec 976.75 965.25 974.25 7.25
22-Mar 964.75 952.75 961 7.25
Live Cattle             cents/lb        
21-Oct 125.8 124.875 124.9 -0.55
Feeder Cattle         cents/lb        
21-Nov 160.825 158.6 159.125 -0.225
Lean Hogs             cents/lb        
22-Feb 81.675 80.35 80.55 -1.225
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Nov 83.74 81.8 82.89 0.45
Diesel        
21-Nov 2.5674 2.5078 2.5564 0.0072
Unleaded Gasoline   $/gallon        
21-Nov 2.5004 2.4384 2.4737 -0.0129
Natural Gas        
21-Dec 5.361 5.07 5.338 0.102
Ethanol Futures        
21-Dec     2.207  
U.S. Dollar Index        
21-Dec 93.95 93.49 93.73 -0.215
Gold                      $/ounce        
21-Nov 1785 1763 1767.5 2.7
Copper        
21-Oct 4.75 4.687 4.7125 -0.018
Fertilizer Swaps     (as of 10/15)  
DAP Tampa-index              655.0 0
DAP-New Orleans              755.1 0
Urea-New Orleans              768.9 0
Urea-Middle East              830.0 0
Urea-Black Sea              710.0 0
UAN (32%) New Orleans              542.9 22.05

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