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Afternoon Market Recap for September 23, 2021

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Wheat grabs double-digit gains.

Corn and soybeans also move modestly higher Thursday

Good afternoon! Grains were in the green again today, anchored by solid gains from winter wheat contracts, which trended about 2% higher on a round of technical buying spurred largely by North American production concerns and relatively tight domestic and global supplies. Corn prices rose 0.7% on the ensuing spillover strength, with further support from solid gains on Wall St. and in the energy sector. Soybeans saw much more modest gains of around 0.15% today.

Not much additional rainfall is expected for the Midwest and Plains between Friday and Monday, although portions of the eastern Corn Belt could gather as much as 0.25” during that time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook still expects seasonally warm weather for the central U.S. between September 30 and October 5, with drier-than-normal conditions likely east of the Mississippi River.

On Wall St., the Dow boomed 560 points higher in afternoon trading to 34,819 as fears over the possibility of the collapse of Chinese developer Evergrande somewhat abated. Investors were also encouraged that the Federal Reserve will keep current monetary stimulus policies in place for now. Energy futures also improved, with crude oil up nearly 1.5% in afternoon trading to move back above $73 per barrel. Diesel rose nearly 1.75%, with gasoline up more than 2%. The U.S. Dollar softened moderately.

On Wednesday, commodity funds were net buyers of corn (+8,500), soybeans (+5,500), soyoil (+2,000) and CBOT wheat (+10,000) contracts and were roughly even trading soymeal contracts.

Corn

Corn prices made moderate inroads after a round of technical buying today. Prices found support from rising wheat and other commodities, and a large sale to Guatemala announced this morning generated some additional tailwinds. December and March futures each added 3.75 cents to reach $5.2925 and $5.3675, respectively.

Corn basis bids jumped 25 cents higher at an Iowa processor on Thursday and were variable across Midwestern ethanol plants while holding steady elsewhere across the central U.S. today.

Private exporters announced to USDA the sale of 5.4 million bushels of corn for delivery to Guatemala during the 2021/22 marketing year, which began September 1.

Corn export sales moved higher week-over-week but only gathered another 14.7 million bushels last week. Analysts were generally expecting a bigger haul, with trade guesses ranging between 11.8 million and 31.5 million bushels. Cumulative sales for the 2021/22 marketing year are less than half of last year’s pace so far, with 33.3 million bushels.

Corn export shipments were more robust, with 19.1 million bushels. Mexico accounted for more than half of that total, with 10.0 million bushels.

The International Grains Council reported an increase in its estimates for 2021/22 global corn production, due primarily to improvements in the United States and Ukraine. IGC’s new estimates are for 1.209 billion metric tons.

“Corn, soybean, and wheat futures have continued to trade in a consolidation pattern for the past few weeks, on key support levels on daily charts,” according to Naomi Blohm, senior market adviser with Stewart Peterson. “The market needs fresh news to make a move - either fall lower from key support levels, or rally higher through overhead technical resistance on charts.” Blohm walks through five factors in particular that she is watching closely in today’s Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 125,888 contracts, tracking 20% below Wednesday’s final count of 157,871.

Soybeans

Soybean prices inched slightly higher after some technical buying today, supported largely by spillover strength from corn and wheat, with a solid round of export sales data from USDA this morning lending some additional support. November futures picked up 1.75 cents to $12.8450, with January futures adding 2.25 cents to $12.94.

Soybean basis bids rose 4 cents higher at an Indiana processor while dropping 10 cents at an Iowa processor on Thursday while holding steady elsewhere across the central U.S. today.

Soybean exports saw net sales reach 33.2 million bushels last week. That was toward the higher end of trade estimates, which ranged between 18.4 million and 40.4 million bushels. Cumulative sales for the 2021/22 marketing year are still slim versus last year’s pace so far, however.

Soybean export shipments came in at 10.4 million bushels. Mexico was the No. 1 destination, with 3.1 million bushels.

IHS Markit Agribusiness raised its forecast for 2021/22 Brazilian soybean production, which is now at 5.328 billion bushels.

Preliminary volume estimates were for 104,943 contracts, slipping slightly below Wednesday’s final count of 107,188.

Wheat

Wheat prices moved significantly higher, with most contracts rising by double digits Thursday after a round of technical buying. Traders remain watchful of relatively tight domestic and global stocks, coupled with various production challenges scattered around the world. Spillover strength from Wall St. and a weakening U.S. Dollar lent additional support. December Chicago SRW futures rose 13.25 cents to $7.19, December Kansas City HRW futures climbed 15 cents to $7.21, and December MGEX spring wheat futures added 9.75 cents to $9.1325.

Wheat exports tumbled 42% lower week-over-week but stayed 1% above the prior four-week average, with 13.1 million bushels. That was a bit toward the lower end of trade estimates, which ranged between 9.2 million and 22.0 million bushels. Cumulative sales for the 2021/22 marketing year are still trending moderately below last year’s pace, with 251.3 million bushels.

Wheat export shipments inched 2% above the prior four-week average, with 18.7 million bushels. Mexico topped all destinations, with 3.4 million bushels.

The International Grains Council lowered its estimates for global 2021/22 wheat production by nearly 37 million bushels, moving to a new total of 28.697 billion bushels.

Pakistan purchased more than 21 million bushels of wheat from optional origins in an international tender that closed earlier this week. The grain is for shipment between November 11 and December 30.

Algeria is thought to have purchased between 11.0 million and 18.5 million bushels of durum wheat, likely sourced from Canada and Mexico, in a tender that closed yesterday. The grain is for shipment in November.

As expected, Jordan issued a new international tender to purchase 4.4 million bushels of milling wheat from optional origins, which closes September 29. Jordan passed on all offers for a similar tender that closed yesterday. The grain is for shipment between January and March.

Taiwan purchased 1.8 million bushels of milling wheat from the United States in a tender that closed earlier today. The grain is for shipment in November.

Preliminary volume estimates were for 59,572 CBOT contracts, inching fractionally above Wednesday’s final count of 59,083.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 531 520.25 529.25 3.75
22-Mar 538.5 527.75 537 3.75
Soybeans        
21-Nov 1290.25 1275.75 1284.25 1.75
22-Jan 1299.75 1285.25 1294 2.25
Soymeal                $/ton        
21-Dec 342.7 338.7 340.1 -1.5
Soyoil                    cents/lb        
21-Dec 57.38 56.12 57.02 0.64
Wheat                    $/bushel        
21-Dec 719.5 704 717.75 13.25
22-Mar 730.25 715 728.5 13.75
KC Wheat        
21-Dec 721.5 705.75 720 15
22-Mar 729.75 714.75 728.5 14.75
MPLS Wheat        
21-Dec 918.75 902 911.5 9.75
22-Mar 904 892.5 898.25 9
Live Cattle             cents/lb        
21-Oct 123.925 123.025 123.175 -0.1
Feeder Cattle         cents/lb        
21-Oct 159.175 156.675 156.825 -0.85
Lean Hogs             cents/lb        
21-Dec 76.675 74.1 76.5 3.125
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Oct 73.5 71.61 73.16 0.93
Diesel        
21-Oct 2.2511 2.1914 2.2456 0.034
Unleaded Gasoline   $/gallon        
21-Oct 2.1735 2.0911 2.1652 0.0413
Natural Gas        
21-Nov 5.098 4.793 5.091 0.236
Ethanol Futures        
21-Nov     2.207  
U.S. Dollar Index        
21-Dec 93.53 92.965 93.03 -0.43
Gold                      $/ounce        
21-Oct 1774.5 1743.9 1766.8 -9.9
Copper        
21-Sep 4.265 4.1975 4.2325 -0.02
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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