markets charts - green with red line phongphan5922/Thinkstock

Afternoon Market Recap for Sept. 25, 2020

Soybeans snap four-session losing streak.

Corn also firms in Friday’s session, with wheat taking on moderate losses

Grains were mixed but mostly higher on an uneven round of technical maneuvering. Corn and soybeans finally overcame four consecutive sessions of losses, tacking on small gains in a choppy session Friday. Some bearish fundamentals are still in place, including harvest pressure and uncertainty surrounding the state of U.S.-China trade relations. Most wheat contracts dropped 1% to 1.5%, in contrast, on lingering concerns about U.S. export competitiveness (or lack thereof) on the world market.

Some additional rainfall will land across much of the central U.S. between today and Monday, per the latest 72-hour cumulative precipitation map from NOAA, but most areas are expecting to see much less than 1” during that time. The agency’s 8-to-14-day outlook predicts widespread seasonally dry weather across most of the United States between October 2 and October 8, with seasonally cool conditions settling into the eastern two-thirds of the country.

On Wall St., stocks are headed for a fourth consecutive week of losses, although the Dow trended 247 points higher this afternoon, clearing 27,062. Investors are still skittish about the prospect of selloffs in the near future. Energy prices were mixed. Crude oil was down slightly this afternoon but is hanging just above $40 per barrel. Diesel picked up gains of around 0.7%, meantime, with gasoline up around 1.25%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net sellers of most grain contracts, including corn (-17,500), soybeans (-13,500), soymeal (-7,750) and soyoil (-3,000) but were net buyers of CBOT wheat (+1,500).

Corn

Corn prices firmed slightly on some technical buying, although the weather rally that stretched from late August into mid-September appears to be over after prices dropped the previous four sessions earlier this week. December futures have eroded 3.3% lower since Monday’s open. Today, December futures added 1.5 cents to $3.65, while March futures picked up a penny to reach $3.7325.

The recent rally came at a somewhat unexpected time, with harvest approaching and an August WASDE report from USDA that most deemed bearish. “What can we learn from how this has played out,” ponders Matt Bennett, farmer and commodity analyst with AgMarket.net. Bennett explores this question in the latest Ag Marketing IQ blog – click here to learn more.

Corn basis bids were steady to firm on Friday after farmer sales have generally slowed own this week. Bids rose between 2 and 3 cents across a handful of Midwestern locations today.

European Union trade lobby Coceral has moderately lowered its forecasts for 2020 EU grain production to 2.472 billion bushels, falling 2.9% from its August estimates after the region slugged through a lot of hot, dry weather this past month.

In Ukraine, 2020/21 corn exports have slumped 68% year-over-year, reaching just 24.4 million bushels through September 25. The country’s wheat exports are mostly in line with last year’s pace, but total grain exports are down 10.6% so far.

German hog farmers may receive governmental aid after dealing with an outbreak of African swine fever. All 32 cases of ASF have been discovered in wild pigs so far, but an on-farm outbreak could prove highly contagious and deadly. Traders are watching to see whether this outbreak will fuel U.S. hog demand, which in turn could bump up domestic feed usage.

French consultancy FranceAgriMer once gain lowered its corn quality ratings, which fell to 58% rated in good-to-excellent condition through September 21. Harvest progress is now at 15%, versus 4% a week ago.

Preliminary volume estimates were for 169,168 contracts, staying moderately below Thursday’s final count of 231,377.

Soybeans

Soybean prices moved just high enough to climb back over $10 per bushel on some light technical buying Friday. A large soymeal sale announced this morning helped some, as did generally strong export momentum over the past several weeks. Even so, the past four sessions were rough, with November futures losing 4.1% since Monday’s open and sealing the largest weekly loss since March. Today, November futures rose 1.25 cents to $10.0125, while January futures added 1.75 cents to $10.05.

Soybean basis bids held steady across the central U.S. Friday. Seasonal sales could pick up next week as harvest progress gains momentum. Six percent of the 2020 crop was harvested through September 20, with favorable harvest weather prominent across most of the Midwest and Plains this week.

Private exporters reported to USDA the sale of 100,000 metric tons of soymeal sales for delivery to unknown destinations during the 2020/21 marketing year, which begins October 1.

China, by far the world’s No. 1 soybean importer, purchased 352.7 million bushels of the oilseed in August. The vast majority (85%) of the total was sourced from Brazil. China only bought 6.1 million bushels of soybeans from the United States last month, in contrast, but has been a much more active buyer so far in September, announcing large sales on a nearly daily basis.

Preliminary volume estimates were for 161,953 contracts, trending below Thursday’s final count of 289,382.

Wheat

Wheat prices faded Friday after a lackluster round of export data yesterday sparked new concerns about the pace of U.S. sales in a highly competitive global market. A strengthening U.S. Dollar is creating additional headwinds. December Chicago SRW futures fell 5.75 cents to $5.44, December Kansas City HRW futures lost 8 cents to $4.75, and December MGEX spring wheat futures dropped 5 cents to $5.2975.

USDA will update its 2020 U.S. wheat production estimates next Wednesday in a small grain summary report. Analysts expect the agency to show production potential moving slightly higher, from 1.838 billion bushels in August up to 1.841 billion bushels.

Ukraine’s 2020/21 wheat exports have slipped fractionally below last year’s pace, with 290.3 million bushels through September 25. Ukraine accounts for around 16% of the world’s total grain exports.

European Union grain trade lobby Coceral has mostly held steady its estimates for EU soft wheat production, coming in at 4.747 billion bushels. The group did trim its forecasts for EU corn and barley production, however, citing wide hot, dry weather this summer.

Farmers in Argentina are hopeful that their drought-stressed wheat acres could see some yield-replenishing rains this weekend. “Estimates could improve in central and southern growing areas if rain forecasts materialize over the weekend,” according to a recent report from the Buenos Aires Grains Exchange. That group predicts this season’s wheat production could still reach 643 million bushels, which would be 7% below last year’s haul, if realized.

Preliminary volume estimates were for 55,020 CBOT contracts, sliding well below Thursday’s final count of 101,301.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 367.5 363 365 1.5
21-Mar 375.75 371.5 373.25 1
Soybeans        
20-Nov 1008 995.25 1001.25 1.25
21-Jan 1011 998.75 1005 1.75
Soymeal                $/ton        
20-Dec 340.2 333.4 338.6 2.3
Soyoil                    cents/lb        
20-Dec 33.04 32.22 32.82 0.36
Wheat                    $/bushel        
20-Dec 552.5 543.75 544 -5.75
21-Mar 560 551 551.25 -5.75
KC Wheat        
20-Dec 486 474.75 475 -8
21-Mar 496.25 485 485 -8.5
MPLS Wheat        
20-Dec 536.25 529 529.75 -5
21-Mar 548 540 542.75 -4.5
Live Cattle             cents/lb        
20-Oct 108.45 107.525 107.825 -0.2
Feeder Cattle         cents/lb        
20-Oct 142.5 140.075 140.35 -2
Lean Hogs             cents/lb        
20-Dec 64.85 62.25 64.35 1.075
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Oct 40.64 39.71 40.18 -0.13
Diesel        
20-Oct 1.1281 1.1095 1.1242 0.0075
Unleaded Gasoline   $/gallon        
20-Oct 1.215 1.185 1.2132 0.0175
Natural Gas        
20-Nov 2.918 2.791 2.8 -0.099
Ethanol Futures        
20-Nov 1.32 1.295 1.29 0.01
U.S. Dollar Index        
  94.795 94.225 94.69 0.296
Gold                      $/ounce        
20-Oct 1870.6 1846 1856.3 -12
Copper        
20-Sep 2.991 2.9525 2.9735 0.0045
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
 
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