Afternoon Market Recap for October 25, 2021

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Spring wheat jumps higher again.

Soybeans and winter wheat also up to start the week, with corn mostly unchanged

Wheat prices jumped significantly higher last Friday and were ready for an encore on Monday. Spring wheat contracts firmed 1.5%, with winter wheat contracts up around 0.5% after a round of technical buying spurred by tightening global supplies. Soybean prices grabbed double-digit gains, moving 1.25% higher by the close on positive demand for biodiesel and vegetable oils. Corn prices couldn’t find much positive momentum, meantime, hovering near even after a somewhat choppy session today.

More rains will be moving through the Midwest later this week. The corridor along the Mississippi River could see the highest totals, with some areas likely to receive 1.5” or more between Tuesday and Thursday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts below-average temperatures for the eastern half of the U.S. between November 1 and November 7, with drier-than-normal conditions likely for most of the country.

On Wall St., the Dow tacked on another 87 points in afternoon trading to reach a new record of 35,764, as bullish corporate earnings reports continue to roll in. Energy futures were mostly higher this afternoon, too. Crude oil was trading near-even at more than $83 per barrel, while gasoline and diesel each rose around 1% higher. The U.S. Dollar firmed moderately.

On Friday, commodity funds were net buyers of corn (+3,500), soymeal (+2,500) and CBOT wheat (+7,500) contracts but were net sellers of soybeans (-2,500) and soyoil (-1,000).

Corn

Corn prices tested modest gains this morning but ultimately failed to gather any meaningful forward momentum today, as spillover strength from soybeans and wheat ran up against a disappointing set of export inspection data from USDA this morning. December futures remained unchanged, at $5.38, while March futures inched 0.25 cents higher to $5.47.

Corn basis bids were steady to mixed across the central U.S. on Monday, tumbling as much as 21 cents lower at an Illinois river terminal while firming as much as 5 cents at an Indiana ethanol plant today.

Corn export inspections were disappointing, tumbling 48% from a week ago to 21.5 million bushels. That was below the entire range of trade guesses, which came in between 29.5 million and 47.2 million bushels. Mexico was the No. 1 destination, with 10.7 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately behind last year’s pace, with 185.5 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect to see corn harvest move from 52% completion a week ago up to 65% through October 24. Individual trade guesses ranged between 62% and 68%.

This past year, profit margins have made it to levels not seen in nearly a decade. That has Brady Huck, risk advisor with Advance Trading, asking a critical question: Will it be another boom year, or are we setting up for a bust in 2022? Time will tell, Huck notes, but flexibility will be a virtue moving forward.

“One thing that concerns me right now is the habit many have of making marketing decisions based on the previous year’s market,” he says. “Our strongest memories are often those that cause us the greatest pain or are the most recent, and we have tendency to anchor our decisions on those memories.” Gain more insights in today’s Ag Marketing IQ blog.

Preliminary volume estimates were for 160,682 contracts, sliding 11% below Friday’s final count of 179,699.

Soybeans

Soybean prices tilted 1.25% higher after a round of technical buying largely spurred by an uptick in biodiesel demand. Spillover strength from soyoil (which rose 1.75% today) lent additional support. November futures gained 15.5 cents to $12.36, with January futures up 15 cents to $12.4575.

Soybean basis bids tilted 15 cents lower at an Illinois river terminal on Monday while holding steady elsewhere across the central U.S. today.

Soybean export inspections saw week-over-week reductions of around 14% but still turned in a strong performance with 77.3 million bushels. However, it was still toward the lower end of trade guesses, which ranged between 66.1 million and 96.5 million bushels. China was by far the No. 1 destination, with 56.6 million bushels. Cumulative totals for the 2021/22 marketing year are still significantly behind last year’s pace, with 298.7 million bushels.

Ahead of the next crop progress report from USDA, analysts expect the agency to show soybean harvest moving from 60% complete a week ago up to 74% through Sunday. Individual trade guesses ranged between 71% and 77%.

Favorable weather conditions in Brazil have allowed farmers to plant 36% of their intended soybean acres for the 2021/22 season through October 22, per recent reporting from the country’s Safras & mercado consultancy. That’s well above the historical average of 27%. Most entities are expecting record-breaking production this season, barring any major weather calamities.

Meantime, Brazilian farmers face the same challenges as their U.S. counterparts regarding high fuel prices and rising input costs. Julio Bravo takes a closer look in the latest South American Crop Watch blog – click here to learn more.

Preliminary volume estimates were for 249,096 contracts, moving moderately ahead of Friday’s final count of 218,551.

Wheat

Wheat prices picked up where they left off last Friday, trending moderately higher after another round of technical buying today, leaving prices at two-month highs. Robust global demand has some questioning how much high-protein wheat is currently available. Traders largely shrugged off a tepid round of export inspection data from USDA this morning. December Chicago SRW futures added 4.5 cents to $7.6050, December Kansas City HRW futures picked up 4 cents to $7.78, and December MGEX spring wheat futures climbed 15 cents to $10.28.

Wheat export inspections shifted fractionally lower week-over-week, to 5.2 million bushels. That was below the entire range of trade guesses, which came in between 5.5 million and 16.5 million bushels. Taiwan topped all destinations, with 1.4 million bushels. Cumulative totals for the 2021/22 marketing year are falling farther behind last year’s pace, reaching 348.3 million bushels.

Ahead of the next crop progress report from USDA, analysts think the agency will show winter wheat plantings move from 70% completion a week ago up to 81% through Sunday. Analysts also expect to see USDA rate 54% of the crop in good-to-excellent condition.

Russian consultancy Sovecon estimates that the country’s wheat exports will total 132.3 million bushels in October, which would be a month-over-month decline of around 16%, if realized. Russia is the world’s No. 1 wheat exporter.

China sold 32.8 million bushels of its state wheat reserves on auction earlier today, which was 89% of the total available for sale.

Pakistan received multiple offers in its tender to purchase 3.3 million bushels of wheat from optional origins that closed earlier today. No sales have been finalized at this time.

Preliminary volume estimates were for 76,174 CBOT contracts, dropping slightly below Friday’s final count of 82,587.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 542 535 538 0
22-Mar 550.25 543.75 546.75 0.25
Soybeans        
21-Nov 1238.25 1216 1237.25 15.5
22-Jan 1248.25 1226.5 1247 15
Soymeal                $/ton        
22-Jan 329.4 323.4 325.8 0.3
Soyoil                    cents/lb        
22-Jan 63.02 61.59 62.63 1.04
Wheat                    $/bushel        
21-Dec 767 753.25 759.5 4.5
22-Mar 777.5 764.75 771.75 5
KC Wheat        
21-Dec 782.25 768.5 777.75 4
22-Mar 785 771.25 780.5 4.25
MPLS Wheat        
21-Dec 1031 1009 1027 15
22-Mar 1007.5 985 1003 17
Live Cattle             cents/lb        
21-Oct 125.775 124.7 124.95 0.85
Feeder Cattle         cents/lb        
21-Nov 159.9 158.275 158.775 1.875
Lean Hogs             cents/lb        
22-Feb 77.425 76.575 76.775 0.15
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Nov 85.41 83.39 83.53 -0.23
Diesel        
21-Nov 2.5807 2.539 2.5614 0.0225
Unleaded Gasoline   $/gallon        
21-Nov 2.5415 2.4819 2.5129 0.0308
Natural Gas        
21-Dec 6.112 5.629 6.098 0.637
Ethanol Futures        
21-Dec     2.207  
U.S. Dollar Index        
21-Dec 93.96 93.465 93.81 0.185
Gold                      $/ounce        
21-Nov 1810.1 1793.3 1808.6 13.1
Copper        
21-Oct     4.526  
Fertilizer Swaps     (as of 10/22)  
DAP Tampa-index              650.0 -5
DAP-New Orleans              749.6 -6
Urea-New Orleans              763.4 -6
Urea-Middle East              845.0 15
Urea-Black Sea              765.0 55
UAN (32%) New Orleans              592.5 49.6

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