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Afternoon Market Recap for Sept. 23, 2020

Grain prices back in the red.

Corn, soybeans and wheat all finish with small to moderate losses Wednesday

After climbing steadily higher for much of September, grain prices have struggled to push even higher this week. Corn and soybeans finished the session with moderate losses on another round of technical selling. Wheat contracts lost between 1.25% and 1.75%, meantime, on worries about the ability of U.S. grain to compete on the world market, especially as the U.S. Dollar has been strengthening this week.

The latest 72-hour cumulative precipitation map from NOAA still shows moderate rainfall is probable between Thursday and Sunday across much of the upper Midwest, although other areas of the Corn Belt will see little to no measurable accumulations during this time. NOAA’s 8-to-14-day outlook predicts seasonally cool, dry weather will settle across virtually all of the central U.S. from September 30 to October 6.

The latest tech stock selloff on Wall St. continued today, pushing the Dow down 353 points in afternoon trading to 26,934. Energy futures fared better, with crude oil treading water at just under $40 per barrel, while gasoline and diesel each moved more than 1% higher this afternoon. The U.S. Dollar firmed moderately.

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

Corn

Corn prices eased slightly on another round of technical selling Wednesday, spilling into the red for the third consecutive session after climbing to nearly six-month highs late last week. Harvest pressure is applying additional headwinds. December futures slipped 0.75 cents to $3.6850, with March futures down 1.5 cents to $3.7725.

Corn basis bids were steady to mixed Wednesday, moving as much as 4 cents higher at an Iowa processor and falling as much as 13 cents lower at an Illinois processor today.

Ahead of the next weekly export sales report, out Thursday morning, analysts expect the agency to show corn sales ranging between 41.3 million and 70.9 million bushels for the week ending September 17.

Ethanol production fell for the second straight week, according to the latest batch of data from the U.S. Energy Information Administration. For the week ending September 18, daily production averaged 906,000 barrels, down from a daily average of 926,000 barrels the prior week. November futures fell 4.6% this afternoon, dropping to $1.245.

Grains traveling the nation’s railways saw another 22,130 carloads last week, bringing cumulative totals for 2020 up to 797,552 carloads, which is 3.4% behind 2019’s pace so far.

Argentina’s corn production may fall 6% year-over-year to 1.850 billion bushels, according to the Buenos Aires Grains Exchange. The country’s 2020/21 planting season kicked off earlier this month.

Ukraine’s 2020/21 grain exports are nearly 12% lower year-over-year, in large part due to a disappointing start to corn exports, which are only at 24.4 million bushels so far (down 68% compared to last year). Ukraine accounts for approximately 16% of total grain exports.

South Korea purchased 2.7 million bushels of corn, likely sourced from South America, in an international tender that closed earlier today. The grain is for arrival in December or January.

Preliminary volume estimates were for 186,049 contracts, sliding moderately below Tuesday’s final count of 244,914.

Soybeans

Soybean prices saw moderate cuts Wednesday, most of which were incurred late in the session. On a positive note, two more large soybean sales were announced this morning, but traders are also generally worried over faltering U.S.-China relations, with harvest pressure adding some seasonal headwinds. November futures dropped 7.25 cents to $10.1250, while January futures fell 7.5 cents to $10.17.

Soybean basis bids were largely steady across the central U.S. Wednesday but did move between 1 and 5 cents higher at a handful of Midwestern locations today.

Private exporters reported two more large soybean sales this morning. The first was for 4.9 million bushels to China, and the second was for 4.6 million bushels to unknown destinations. Both sales are for delivery during the 2020/21 marketing year, which began September 1.

Prior to USDA’s next weekly export sales report, out tomorrow morning, analysts expect the agency to show soybean sales ranging between 73.5 million and 110.2 million bushels for the week ending September 17, reflective of the recent flurry of Chinese bookings throughout the month.

Analysts also expect to see between 200,000 and 500,000 metric tons of soymeal sales last week, plus another zero to 40,000 MT of soyoil sales.

The Buenos Aires Grains Exchange is predicting a small decline in Argentina’s soybean production from last year, with an estimated 1.709 billion bushels. The country has battled with some drought problems in recent months.

How are your field conditions? Curious to know how other farmers around the country are faring? Don’t miss the latest batch of Feedback From The Field updates, which include a bevy of farmer anecdotes and an interactive map. Click here to learn more.

Preliminary volume estimates were for 216,706 contracts, which was moderately below Tuesday’s final count of 266,774.

Wheat

Wheat prices faced steep cuts Wednesday, losing as much as 1.75% on worries over U.S. competitiveness on the global market, although some sales to key Asian trade partners were confirmed today. December Chicago SRW futures fell 9.75 cents to $5.4825, December Kansas City HRW futures dropped 7.75 cents to $4.84, and December MGEX spring wheat futures lost 6.75 cents to $5.33.

Ahead of Thursday morning’s weekly export sales report from USDA, analysts expect the agency to show wheat sales ranging between 9.2 million and 22.0 million bushels for the week ending September 17.

Battling some drought problems, Argentina farmers are expected to harvest around 643 million bushels of wheat, dropping 7% year-over-year if realized, according to the Buenos Aires Grains Exchange. Harvest typically begins in December.

Ukraine is also battling drought, and the country’s APK-Inform consultancy reports that farmers have been holding off winter grain planting because of overly dry conditions. Planting starts in early September in a typical year. Wheat exports in 2020/21 are also lower year-over-year so far, at 273.7 million bushels.

Pakistan issued an international tender to purchase 11 million bushels of wheat that closed earlier today. Russian grain was thought to have been the lowest offer. The grain is for arrival by the end of January.

Japan is looking to purchase 2.9 million bushels of feed wheat and 4.6 million bushels of feed barley in a simultaneous buy-and-sell auction that will be held next Wednesday. The grain is for arrival in late February.

Japan also issued a regular tender to purchase 3.2 million bushels of food-quality wheat from the United States and Canada. Of the total, 68% is expected to be sourced from the U.S.

Taiwan purchased 3.4 million bushels of wheat from the U.S. in a tender that closed earlier today. The grain is comprised of two consignments to be shipped in November and December.

South Korea purchased 2.4 million bushels of animal feed wheat, likely from the U.S., in a private deal that recently closed. The grain is for shipment in January.

Preliminary volume estimates were for 77,472 CBOT contracts, trending moderately lower than Tuesday’s final count of 107,937.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 370.25 365.75 368.5 -0.75
21-Mar 379.5 375.5 377.25 -1.5
Soybeans        
20-Nov 1025.5 1011 1012.5 -7.25
21-Jan 1029.75 1015.5 1017 -7.5
Soymeal                $/ton        
20-Dec 348.6 339.4 344.6 2.7
Soyoil                    cents/lb        
20-Dec 33.76 32.61 32.8 -0.82
Wheat                    $/bushel        
20-Dec 560.25 547.25 548.25 -9.75
21-Mar 568 555.25 556.25 -9.5
KC Wheat        
20-Dec 494.5 483.25 484 -7.75
21-Mar 505.25 494.25 494.5 -8.25
MPLS Wheat        
20-Dec 541.75 532.5 533 -6.75
21-Mar 554 545.5 546.25 -6.5
Live Cattle             cents/lb        
20-Oct 107.475 106.625 107.25 0.775
Feeder Cattle         cents/lb        
20-Oct 141.625 140.45 141.475 0.85
Lean Hogs             cents/lb        
20-Dec 64.5 63.275 64.2 0.1
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Oct 40.75 39.26 39.84 0.04
Diesel        
20-Oct 1.1278 1.0871 1.1065 0.0104
Unleaded Gasoline   $/gallon        
20-Oct 1.2 1.1647 1.1799 0.0156
Natural Gas        
20-Nov 2.841 2.518 2.792 0.195
Ethanol Futures        
20-Nov 1.31 1.31 1.31 -0.015
U.S. Dollar Index        
  94.46 93.965 94.45 0.432
Gold                      $/ounce        
20-Oct 1901.6 1855.6 1875.5 -23.1
Copper        
20-Sep 3.05 2.98 2.98 -0.079
Fertilizer Swaps     (as of 9/18)  
DAP Tampa-index              342.5 0
DAP-New Orleans              394.1 -1
Urea-New Orleans              248.6 -3
Urea-Middle East              260.0 -6
Urea-Black Sea              242.5 -4
UAN (32%) New Orleans              132.3 0

 

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