Afternoon Market Recap for September 20, 2021

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Broad selloff slashes grain prices.

Corn, soybeans and wheat all fall 0.5% to 1.75% lower Monday

Good afternoon! Converging bearish factors (more on this below) triggered a broad selloff to start the week that affected everything from overseas and domestic stock markets to energy prices. Grain markets were not spared, either – the ensuing spillover weakness spurred a round of technical selling that led to moderate losses by the close. Corn prices fell around 0.75%, with soybeans down more than 1.5% and some wheat contracts dropping as much as 1.75% today.

Most areas east of the Mississippi River will see at least some measurable moisture between Tuesday and Friday, while areas farther west will stay dry during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook calls for seasonally warm weather for most of the country between September 27 and October 3, with drier-than-normal conditions likely for the eastern two-thirds of the U.S. next week.

On Wall St., the Dow plummeted 838 points lower in afternoon trading to 33,746 – on pace for its worst single session in nearly a year. Investors are worried about multiple factors unspooling right now, including worries over rising covid cases and speculation that the Federal Reserve will start unwinding stimulus measures. There are also substantial hype over whether a major Chinese property developer will default after failing to make a recently due bond payment.

Energy futures also saw significant cuts today. Crude oil dropped 2.5% in afternoon trading to fall back below $71 per barrel. Gasoline and diesel each dropped around 2%. The U.S. Dollar firmed slightly.

On Friday, commodity funds were net sellers of all major grain contracts, including corn (-2,500), soybeans (-5,500), soymeal (-1,500), soyoil (-1,000) and CBOT wheat (-2,500). For the week ending September 14, money managers still held a net long position for corn (+212,229) and soybean (+55,380) contracts.

Corn

Corn prices failed to find any positive momentum after a broad selloff in other commodities triggered a round of technical selling today. December futures fell 5.25 cents to $5.22, with March futures down 3.75 cents to $5.3050.

Corn basis bids were steady to weak on Monday, falling 5 to 30 cents lower at two Midwestern ethanol plants and tumbling 37 cents at an Ohio elevator today.

Corn export inspections jumped 153% higher from a week ago to reach 15.9 million bushels. That was also toward the higher end of trade estimates, which ranged between 5.9 million and 17.7 million bushels. Mexico was the No. 1 destination, with 8.6 million bushels. Cumulative totals for the 2021/22 marketing year are still off to a sluggish start compared to a year ago, with 23.7 million bushels since the start of September.

Ahead of the next weekly crop progress report from USDA, out later this afternoon, analysts expect the agency to hold corn quality ratings steady, with 58% of the crop rated in good-to-excellent condition through Sept. 19. Analysts also anticipate harvest progress moving from 4% a week ago to 10% through Sunday.

European Union’s crop monitoring service MARS has slightly lowered its estimates for 201 EU corn yields, moving it to an average of 117.9 bushels per acre (7.78 tons per hectare).

Preliminary volume estimates were for 195,272 contracts, trending higher than Friday’s final count of 168,174.

Soybeans

Soybean prices slumped after spillover weakness from a broad range of other commodities spurred a round of technical selling today. Prices closed around 1.6% lower after a sometimes choppy session. November and January futures each dropped 20.5 cents lower, closing at $12.6350 and $12.7250, respectively.

Soybean basis bids dipped a penny lower at two interior river terminals while trending 5 cents higher at an Ohio facility today. Bids held steady elsewhere across the central U.S. to start the week.

Soybean export inspections improved 42% from a week ago to reach 10.1 million bushels. That was near the middle of trade estimates, which ranged between 3.7 million and 14.7 million bushels. Mexico led all destinations, with 3.3 million bushels. Cumulative totals for the 2021/22 marketing year are still off to a very slow start compared to a year ago, with 18.3 million bushels since Sept. 1.

Ahead of this afternoon’s crop progress report from USDA, analysts think the agency will hold soybean quality ratings steady from a week ago, with 57% of the crop rated in good-to-excellent condition through Sept. 19. Analysts also expect USDA to show harvest progress officially underway, with 5% complete through Sunday.

Chinese soybean purchases from Brazil in August rose nearly 11% year-over-year, reaching 332.2 million bushels. In contrast, Chinese imports of U.S. soybeans fell sharply last month, dropping nearly 90% year-over-year to less than 650,000 bushels amid shipping delays caused by Hurricane Ida.

Preliminary volume estimates were for 126,781 contracts, moving a bit ahead of Friday’s final count of 108,139.

Wheat

Wheat prices faded moderately lower after global economic turmoil spilled into the grain markets today and triggered a wave of technical selling that left some contracts down as much as 1.75%. December Chicago SRW futures fell 8.5 cents to $7.0025, December Kansas City HRW futures lost 12.25 cents to $7.0075, and December MGEX spring wheat futures dropped 3.75 cents to $8.9675.

Wheat export inspections moved fractionally lower week-over-week, to 20.7 million bushels. That was still on the very high end of trade estimates, which ranged between 12.9 million and 22.0 million bushels. Mexico was the No. 1 destination, with 4.0 million bushels. Cumulative totals for the 2021/22 marketing year are still moderately trailing last year’s pace, with 283.4 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts anticipate the agency will show winter wheat plantings moving from 12% completion a week ago up to 22% through September 19.

Russian consultancy Sovecon estimates that the country’s wheat exports in September will reach 165.3 million bushels, which will be the largest monthly tally since February, if realized. Russia is the world’s No. 1 wheat exporter.

Ukraine’s grain stocks are at 24.2 million metric tons through Sept. 1, per the country’s State Statistics Service. That’s a year-over-year increase of nearly 41% as the country prepares for the likelihood of a record-breaking grain harvest this year. Ukraine is a significant exporter of both corn and wheat.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 527 515.25 521.75 -5.25
22-Mar 534.25 523.25 529.75 -3.75
Soybeans        
21-Nov 1286 1262 1262.5 -20.5
22-Jan 1294 1271.25 1271.75 -20.5
Soymeal                $/ton        
21-Dec 342.6 338.6 339.8 -2.2
Soyoil                    cents/lb        
21-Dec 56.36 54.8 54.87 -1.43
Wheat                    $/bushel        
21-Dec 710.75 695.75 700.75 -8.5
22-Mar 720.75 706.75 711.5 -8.75
KC Wheat        
21-Dec 715 697 700 -12.25
22-Mar 723 706.25 709 -12.5
MPLS Wheat        
21-Dec 898.75 885.75 894 -3.75
22-Mar 886.5 875 882 -4.25
Live Cattle             cents/lb        
21-Oct 122.95 121.8 122.625 -0.175
Feeder Cattle         cents/lb        
21-Oct 157.025 154.95 156.7 0.325
Lean Hogs             cents/lb        
21-Dec 75.225 71.5 74.15 -0.9
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Oct 72.08 69.86 70.4 -1.57
Diesel        
21-Oct 2.2117 2.1486 2.1603 -0.0488
Unleaded Gasoline   $/gallon        
21-Oct 2.1781 2.1037 2.1143 -0.057
Natural Gas        
21-Nov 5.209 4.962 5.008 -0.138
Ethanol Futures        
21-Nov     2.207  
U.S. Dollar Index        
21-Dec 93.445 93.17 93.235 0.059
Gold                      $/ounce        
21-Oct 1766 1740.5 1753.1 3.7
Copper        
21-Sep 4.23 4.1 4.1035 -0.142
Fertilizer Swaps     (as of 09/17)  
DAP Tampa-index              655.0 0
DAP-New Orleans              740.2 24
Urea-New Orleans              577.6 -8
Urea-Middle East              497.5 33
Urea-Black Sea              450.0 12
UAN (32%) New Orleans              325.2 0

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