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Afternoon Market Recap for September 22, 2021

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Grain prices back on the rise.

Technical buying lifts most contracts by double digits Wednesday

Good afternoon! After an overall slump for the past several sessions, grain prices finally caught a break today, with bargain buyers entering the fray, and with broad gains in outside commodities lending additional support. Corn prices rose 1.5%, with most wheat contracts gaining between 1.75% and 2.25% today. Soybean gains were more modest, but prices were still up nearly 0.7% by the close.

Between Thursday and Sunday, Michigan and portions of northern Indiana and Ohio could gather another 1.5” or more total rainfall. But the rest of the central U.S. is unlikely to see more than trace amounts of rains for the remainder of this week, according to the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts more seasonally dry weather for the Midwest and Plains between September 29 and October 5, with widespread warmer-than-normal conditions likely as well.

On Wall St., the Dow jumped 342 points higher in afternoon trading to 34,262 after the Federal Reserve indicated it wasn’t yet ready to raise interest rates or amend its current monetary stimulus policies, including monthly purchases of $120 billion in Treasurys and mortgage-backed securities. Energy futures also moved higher today, with crude oil up nearly 2.5% in afternoon trading to move back above $72 per barrel. Diesel rose 1.75%, with gasoline up around 1%. The U.S. Dollar firmed slightly.

On Tuesday, commodity funds were net buyers of soybeans (+6,500, soymeal (+2,500) and soyoil (+500) contracts but were net sellers of corn (-3,000) and CBOT wheat (-6,500).

Corn

Corn prices moved around 1.5% higher on a round of bargain buying, with spillover strength from a broad range of other commodities lending additional support today. December futures gained 8 cents to $5.25, while March futures added 7.5 cents to $5.3250.

Corn basis bids fell 3 to 10 cents lower at two ethanol plants and trended 3 cents higher at an Illinois river terminal while holding steady at most other Midwestern locations on Wednesday.

According to the latest data from the U.S. Energy Information Administration, ethanol production fell slightly week-over-week, moving from a daily average of 937,000 barrels down to 926,000 daily barrels for the week ending Sept. 17. The daily average hasn’t cracked the one-million-barrel mark since late July and remains moderately below pre-pandemic production levels.

Ahead of the next export report from USDA, out Thursday morning, analysts think the agency will show corn sales ranging between 11.8 million and 31.5 million bushels for the week ending Sept. 16 – expressing plenty of confidence that actuals will surpass the prior week’s tally of 9.7 million bushels.

Brazil’s Anec lowered its estimates for the country’s corn exports in September by 5% to 109.4 million bushels. Total Brazilian corn exports this marketing year could reach 866.1 million bushels.

Grain traveling the nation’s railways totaled 19,432 carloads last week. Year-to-date totals of 844,958 carloads is trending 8.8% higher than last year’s pace so far.

Preliminary volume estimates were for 159,537 contracts, falling slightly below Tuesday’s final count of 162,780.

Soybeans

Soybean prices trended moderately higher after some bargain buying amid a choppy session Wednesday. Spillover strength from improved corn, wheat and energy futures lent a helping hand. November and January futures each added 8.5 cents to reach $12.8250 and $12.9125, respectively.

Soybean basis bids were largely steady but did jump 25 cents higher at an Indiana processor while tilting 1 to 2 cents lower at two other Midwestern locations on Wednesday.

Ahead of tomorrow morning’s export report from USDA, analysts anticipate the agency will show soybean sales ranging between 18.4 million and 40.4 million bushels for the week ending September 16. Analyst also expect to see soymeal sales ranging between 75,000 and 275,000 metric tons, plus up to 20,000 MT of soyoil sales.

Brazil’s Anec expects the country’s soybean exports to reach 185.2 million bushels this month, which is a 4.3% increase from its forecast a week ago. Total soybean exports this marketing year are easily expected to top 3 billion bushels. The 2021/22 production season has already begun in some areas, amid concerns about a possible return of La Niña conditions. Julio Bravo shared some farmer anecdotes in the latest South American Crop Watch blog – click here for details.

If you don’t manage risk, then risk might manage you, warns Brian Basting, commodity research analyst with Advance Trading, Inc. “By following a system of rules for managing a position during periods of increased market uncertainty, regardless of market direction, your marketing would follow a disciplined approach,” he notes in a recent Ag Marketing IQ blog – click here to learn more.

What will be the fate of dicamba in 2022? Farm Futures policy editor Jacqui Fatka takes a close look at the current situation along with some possible outcomes – click here to learn more.

Preliminary volume estimates were for 107,239 contracts, drifting slightly below Tuesday’s final count of 114,606.

Wheat

Wheat prices found support from broad gains in other commodities as well as outside markets today. Most contracts were up between 1.75% and 2.25% by the close. December Chicago SRW futures rose 15.75 cents to $7.06, December Kansas City HRW futures climbed 16 cents to $7.0650, and December MGEX spring wheat futures gained 15.25 cents to $9.03.

Ahead of Thursday morning’s export 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 16.

Refinitiv Commodities Research estimates that 2021/22 Canadian wheat production potential fell 6% from prior forecasts, to 819.4 million bushels. This season’s harvest is running ahead of schedule, meantime, amid widespread dry weather.

Pakistan issued an international tender to purchase 23.5 million bushels of wheat from optional origins that closes next Wednesday. The grain is for shipment in January and February. Pakistan has been a very active buyer of imported wheat in recent months.

The Philippines purchased around 4.1 million bushels of animal feed wheat from optional origins (but potentially from Australia) in a tender that closed earlier today. The grain is for shipment in December and January.

Jordan received multiple submissions in its tender to purchase 4.4 million bushels of milling wheat from optional origins that closed earlier today, but passed on all offers. The country will likely issue another tender for the same amount, expiring September 29.

Preliminary volume estimates were for 59,083 CBOT contracts, inching fractionally below Tuesday’s final count of 59,397.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 526.25 516 525.5 8
22-Mar 533.75 524.25 533 7.5
Soybeans        
21-Nov 1285 1270.25 1282.75 8.5
22-Jan 1293.5 1279 1291.75 8.5
Soymeal                $/ton        
21-Dec 344 340.1 341.8 0
Soyoil                    cents/lb        
21-Dec 56.58 54.36 56.35 1.03
Wheat                    $/bushel        
21-Dec 706.75 688 705.75 15.75
22-Mar 717 699.25 716 15.75
KC Wheat        
21-Dec 706.75 688.5 706 16
22-Mar 715.75 698 714.75 16
MPLS Wheat        
21-Dec 904 883.75 903.5 15.25
22-Mar 891.25 874.75 890.75 13.75
Live Cattle             cents/lb        
21-Oct 123.45 122.7 123.45 1
Feeder Cattle         cents/lb        
21-Oct 157.975 156 157.7 1.075
Lean Hogs             cents/lb        
21-Dec 74.925 72.5 73.5 -0.1
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Oct 72.3 70.64 71.94 1.45
Diesel        
21-Oct 2.2148 2.1755 2.2031 0.0293
Unleaded Gasoline   $/gallon        
21-Oct 2.14 2.0851 2.1176 0.0124
Natural Gas        
21-Nov 4.94 4.817 4.832 -0.01
Ethanol Futures        
21-Nov     2.207  
U.S. Dollar Index        
21-Dec 93.48 92.97 93.465 0.265
Gold                      $/ounce        
21-Oct 1785.9 1765.7 1767 -9
Copper        
21-Sep 4.2685 4.142 4.2675 0.1395
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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