Afternoon Market Recap for September 21, 2021

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Corn’s decline continues, soybeans firm.

Wheat prices finish Tuesday’s session with moderate losses

Good afternoon! Grain prices were mixed today, following mostly moderate losses in Monday’s session. Corn prices continued to fade on a round of technical selling spurred by harvest pressure and better-than-expected crop conditions. Wheat prices also landed in the red, with most contracts losing between 0.75% and 1.5% today. Soybeans tacked on double-digit gains, in contrast, with some bargain buyers entering the fray after prices slumped to a three-month low yesterday.

The eastern Corn Belt could see some significant rainfall between Wednesday and Saturday, with some areas set to gather 3” or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. Areas farther west will see little to no accumulation later this week, in contrast. The agency’s 8-to-14-day outlook predicts seasonally dry weather likely for the entire central U.S. between September 28 and October 4. Warmer-than-normal conditions are also probable for the Midwest and Plains next week.

On Wall St., the Dow was little-changed Tuesday after facing steep cuts yesterday, dipping 9 points lower to 33,960 in afternoon trading. Investors still have a close eye on Chinese developer Evergrande, which is in danger of default. Some are comparing the situation to the Lehman Brothers implosion of 2008. Energy futures were mixed but mostly higher. Crude oil firmed around 0.5% to move closer to $71 per barrel. Diesel rose 0.75% this afternoon, while gasoline fell 0.5%. The U.S. Dollar softened slightly.

On Monday, commodity funds were net sellers of all major grain contracts, including corn (-3,500), soybeans (-9,500), soymeal (-3,000), soyoil (-4,000) and CBOT wheat (-6,000).

Corn

Corn prices declined another 1% lower Tuesday on a new round of technical selling spurred by harvest pressure and rising quality ratings. Most analysts are expecting a total production of around 15 billion bushels this season, which will push ending stocks higher and reinforces the importance of strong exports and domestic usage. Today, December and March futures each dropped 5.25 cents to close at $5.1650 and $5.2450, respectively.

Corn basis bids showed plenty of variability on Tuesday, moving as much as 22 cents higher at a Nebraska elevator while tumbling as much as 55 cents lower at a Nebraska processor today.

Corn harvest moved from 4% complete a week ago to 10% through September 19, mirroring analyst expectations. That puts the 2021 pace off to a slightly faster start than the prior five-year average of 9%. Nearly all of this year’s crop (93%) is now dented, with more than half (57%) now fully mature. Both of those maturity phases are tracking ahead of the prior five-year average.

Corn quality improved a point, with 59% of the crop now rated in good-to-excellent condition. Another 26% is rated fair (down a point from last week), with the remaining 15% rated poor or very poor (unchanged from last week).

Per the latest data from the European Commission, EU corn imports during the 2021/22 marketing year are down 18% from a year ago, with 122.6 million bushels through September 19.

In Argentina, the government has signed a new deal with a Belgian firm to dredge the Parana River over the next three months. This waterway is key for transporting grains for export. The river is experiencing its lowest levels in nearly eight decades.

Stay focused on harvesting your 2021 crops, but don’t lose sight of marketing opportunities for 2022, according to grain market analyst Bryce Knorr. “My way-too-early 2022 forecast puts the average cash prices for corn at $4.22, a dollar or more less than growers could receive for this year’s harvest,” Knorr notes in today’s Ag Marketing IQ blog. “Soybean prices could be down more than $2, but still come in at $10.59.” Click here for additional analysis from Knorr.

Preliminary volume estimates were for 164,714 contracts, trending 16% lower than Monday’s final count of 195,154.

Soybeans

Soybean prices fell to a three-month low yesterday, which attracted some bargain buyers on Tuesday. Prices moved nearly 1% higher in mid-morning trading before stabilizing during the last two and a half hours of the session. November futures rose 11.75 cents to $12.7425, with January futures up 11 cents to $12.8275.

Soybean basis bids were mixed at four Midwestern processors Tuesday, moving as much as 10 cents in either direction. Bids held steady at most other locations across the central U.S. today.

Soybean harvest progress moved to 6% through Sunday, matching the prior five-year average. More than half of the crop (58%) is now dropping leaves, up from 38% a week ago. That’s ahead of both 2020’s pace of 56% and the prior five-year average of 48%.

USDA raised soybean quality ratings by a point, with 58% of the crop now in good-to-excellent condition. Another 28% is rated fair (down a point from last week), with the remaining 14% rated poor or very poor (unchanged from a week ago).

European Union soybean imports during the 2021/22 marketing year continue to moderately trail last year’s pace, reaching 105.1 million bushels through September 19. EU soymeal and canola imports are also trending moderately lower year-over-year so far.

Preliminary volume estimates were for 116,494 contracts, slightly trailing Monday’s final count of 126,257.

Wheat

Wheat prices sputtered in a somewhat choppy session Tuesday, with most contracts losing double digits by the close after a round of technical selling today. December Chicago SRW futures dropped 11.25 cents to $6.8950, December Kansas City HRW futures fell 10.5 cents to $6.8950, and December MGEX spring wheat futures faded 8 cents lower to $8.86.

Winter wheat plantings moved from 12% complete a week ago up to 21% through Sunday. That’s a bit faster than 2020’s pace of 19% and the prior five-year average of 18%. Just 3% of the crop is now emerged, which matches last year’s pace and bests the prior five-year average of 2% so far.

European Union soft wheat exports during the 2021/22 marketing year have reached 239.9 million bushels through September 19, a year-over-year increase of 43%. EU barley exports are also trending 18% above last year’s pace, with 108.9 million bushels.

Russian consultancy Sovecon slightly raised its forecasts for the country’s 2021 wheat production to 2.778 billion bushels, citing good yields coming out of Siberia. Russia is the world’s No. 1 wheat exporter.

Japan issued a regular tender to purchase 4.2 million bushels of food-quality wheat from the United States and Canada., which closes later this week. Of the total, 72% is expected to be sourced from the U.S. The grain is for arrival by the end of December.

Preliminary volume estimates were for 59,406 CBOT contracts, moving slightly ahead of Monday’s final count of 51,835.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 522.75 512.75 517 -5.25
22-Mar 530.75 521 525 -5.25
Soybeans        
21-Nov 1275.5 1257.5 1274 11.75
22-Jan 1284.5 1266.5 1282.75 11
Soymeal                $/ton        
21-Dec 343.5 339 341.8 2.1
Soyoil                    cents/lb        
21-Dec 55.5 54.18 55.29 0.38
Wheat                    $/bushel        
21-Dec 701 686 690.25 -11.25
22-Mar 711.75 697 701 -11
KC Wheat        
21-Dec 701.75 686.25 690.5 -10.5
22-Mar 710 695.5 699.75 -10.75
MPLS Wheat        
21-Dec 894.75 881.75 887.75 -8
22-Mar 882.5 871 876.75 -7
Live Cattle             cents/lb        
21-Oct 123.6 122.35 122.475 -0.3
Feeder Cattle         cents/lb        
21-Oct 157.8 156.275 156.55 -0.125
Lean Hogs             cents/lb        
21-Dec 74.225 71.7 73.25 -0.975
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Oct 71.63 69.67 70.51 0.22
Diesel        
21-Oct 2.1951 2.144 2.1779 0.0189
Unleaded Gasoline   $/gallon        
21-Oct 2.1415 2.0735 2.1109 -0.0043
Natural Gas        
21-Nov 5.083 4.766 4.859 -0.163
Ethanol Futures        
21-Nov     2.207  
U.S. Dollar Index        
21-Dec 93.28 93.04 93.195 -0.061
Gold                      $/ounce        
21-Oct 1780.8 1756.3 1769.7 7.9
Copper        
21-Sep 4.1645 4.022 4.111 -0.006
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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