Morning Market Review for December 6, 2021

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Grains edge lower on quiet night. (Comments are updated by 7:30 a.m. Central Time.)

Uneventful trading night sends grains fractionally lower, with some omicron concerns present

  • Corn down 1-4 cents
  • Soybeans down 3-4 cents; Soymeal down $3.5/ton; Soyoil up $0.22/lb
  • Chicago wheat down 5-6 cents; Kansas City wheat down 2-4 cents; Minneapolis wheat down 3-4 cents

*Prices as of 6:55am CST.

Author’s Note

Good morning! The Farm Futures team is conducting our tri-annual farmer survey with our readers to estimate 2021 production and 2022 acreage. The survey results are widely regarded in the marketplace and are available to farmers looking to make pro-active marketing decisions leading up to the January 2022 WASDE report issued by USDA.

Want to participate in our farmer survey? Click here to share your farm’s insights, which will remain confidential. Results for 2021 production will be released online in early January and 2022 acreage estimates will be announced at the Farm Futures Business Summit in Coralville, Iowa as well as online on January 20.

Thank you! -JH

Corn

Corn prices edged slightly lower overnight, down $0.02-$0.04/bushel at last glance. While omicron fears lessened and resulted in gains for energy and equities markets, the new variant discovery seemed to offer the only explanation for lower grains prices this morning.

"The fear about the economic impact of the new coronavirus variant Omicron is weighing on the wheat, soybean and corn markets today with bullish news being shrugged off," Matt Ammermann, StoneX commodity risk manager, told Reuters this morning. "Overall, there is no major concern about weather in the U.S. despite some lack of snow cover protection in some wheat areas."

New data out from China’s statistics bureau overnight finds that despite torrential rains this past fall, China’s 2021 corn production still rose 4.6% on the year to 10.732 billion bushels. A 5% annual increase in planted area to 107 million acres helped spur China’s larger output, especially since the excessive rains in China’s prime corn-growing regions in the north this fall sent 2021 yields 0.4% lower than those of 2020.

USDA currently pegs 2021 Chinese corn production slightly higher, at 10.748 billion bushels. But the damage to crop quality and yields due to the harvest rains could offset some of the year’s gains for Chinese corn production.

China is expected to import over 1 billion bushels of corn in the 2021/22 marketing year, according to USDA’s best estimates, after bringing in nearly 1.2 million bushels last year. The import volumes are largely expected to dictate price discovery for U.S. corn as export season heats up in the U.S. early next year.

Soybeans

Markets awaited news of new Chinese soybean purchases overnight, especially after last week’s buying spree, but a quiet night on the overnight markets sent soybean futures prices $0.03-$0.04/bushel lower in the absence of new sales activity.

Soyoil futures rose after Malaysian palm oil futures gained 2% in the overnight trade following tightening forecasts of existing palm oil stockpiles. Higher global energy prices on improved demand outlooks were supported by easing fears of the newly discovered omicron coronavirus variant.

Competitive freight costs in Brazil and its potentially record-setting crop continue to cap gains in the U.S. Soybean export shipments from the U.S. to China are expected to shrink this year relative to last due in large part to Brazil’s recovery after last year’s harvest delays but also primary because of shipping delays out of U.S. ports earlier this summer following Hurricane Ida damage.

Wheat

A 25-million-bushel international wheat tender from Saudi Arabia closed overnight with a bevy of interested sellers. But the surging global demand was not enough to reverse price losses in the U.S. wheat complex this morning.

Wheat futures traded $0.02-$0.05/bushel lower overnight as the dollar strengthened and traders evaluated potential trade demand later in the marketing year.

Russian wheat prices traded lower last week after six consecutive weeks of gains. The Russian government is reportedly considering an export quota in the second half of its 2021/22 marketing year though any policy is likely to be less restrictive than previously believed.

While speculation about the potential volumes remains largely unknown by the markets, sources suggest that the quota could span over 330.7 million bushels of wheat between February 15 – June 30, 2022.

Industry analysts note that the volume is likely equivalent or slightly lower than Russia’s exportable supplies available during that period. But final measures have not been agreed upon and much of the market chatter surrounding the quotas remains largely speculative.

Russia is the world’s largest wheat exporter. An export quota could help alleviate domestic price pressure for Russian consumers, but global wheat buyers are likely going to have to turn to higher prices wheat supplies to fill their milling orders, which could further drive up wheat prices on the global market.

Inputs (Global)

Russia has resumed issuing export licenses fertilizer shipments overnight after some shipments were delayed last week due to Russian fertilizer companies not registering for quotas to purchase said licenses.

Russia’s quotas on fertilizer exports will extend through May 31 after taking effect last Wednesday. The policy is Moscow’s latest move to help curb rising domestic food prices. However, it could further tighten global fertilizer trade flows as spring 2022 planting activity approaches in the Northern Hemisphere.

Weather

This week’s temperatures are likely to be much cooler than last, according to NOAA’s short-range forecasts. A rain system spanning the height of the U.S. will push into the East Coast by this evening.

Up to an inch of precipitation accumulation is possible from Louisiana to New England in the next 24 hours, delaying any harvest activity in the South and Eastern Corn Belt that may be remaining for the 2021 growing season.

Lake effect snowfall is possible in Michigan and Wisconsin this evening. A winter storm system developing today in the Northern Rockies has potential to push east into the Upper Plains and Midwest later this week, so we will be watching that closely over the next couple days.

Financials

S&P 500 shares edged 12.75 points (+0.28%) higher overnight to $4,550.25 on the heels of a recovery in the European stock market to kick off the trading week. Energy shares traded higher on robust global demand outlooks as markets continued to find some relief from fears over the omicron variant of the COVID-19 virus.

China scaled back capital reserve requirements for banks overnight in an effort to counter economic slowdowns post-pandemic. Real estate group Evergrande is nearing a deal to restructure its debt. Asian markets greeted both items with stock losses overnight.

Also worth a read on our website, FarmFutures.com

Morning Ag Commodity Prices - 12/6/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.86 5.8175 5.83 -0.03 -0.51%
MAR '22 CORN $ / BSH  5.855 5.795 5.8025 -0.0375 -0.64%
MAY '22 CORN $ / BSH  5.8775 5.82 5.83 -0.0325 -0.55%
JUL '22 CORN $ / BSH  5.865 5.8175 5.82 -0.035 -0.60%
SEP '22 CORN $ / BSH  5.625 5.5825 5.585 -0.0375 -0.67%
DEC '22 CORN $ / BSH  5.5225 5.48 5.4825 -0.04 -0.72%
MAR '23 CORN $ / BSH  5.59 5.565 5.565 -0.0275 -0.49%
JAN '22 SOYBEANS $ / BSH  12.7475 12.59 12.63 -0.0425 -0.34%
MAR '22 SOYBEANS $ / BSH  12.7875 12.635 12.675 -0.0375 -0.29%
MAY '22 SOYBEANS $ / BSH  12.8475 12.71 12.745 -0.035 -0.27%
JUL '22 SOYBEANS $ / BSH  12.91 12.7675 12.805 -0.035 -0.27%
AUG '22 SOYBEANS $ / BSH  12.7475 12.6875 12.725 -0.035 -0.27%
SEP '22 SOYBEANS $ / BSH  12.5075 12.46 12.4775 -0.0325 -0.26%
NOV '22 SOYBEANS $ / BSH  12.375 12.28 12.31 -0.03 -0.24%
JAN '23 SOYBEANS $ / BSH  12.3575 12.29 12.31 -0.0275 -0.22%
MAR '23 SOYBEANS $ / BSH  12.12 12.0675 12.09 -0.0325 -0.27%
DEC '21 SOYBEAN OIL  $ / LB 57.32 57.25 57.32 0.22 0.39%
JAN '22 SOYBEAN OIL  $ / LB 57.94 57.03 57.3 0.08 0.14%
DEC '21 SOY MEAL $ / TON 366.2 #N/A 367.7 0 0.00%
JAN '22 SOY MEAL $ / TON 359.6 354.8 354.9 -3.7 -1.03%
MAR '22 SOY MEAL $ / TON 356.6 352.8 352.9 -2.9 -0.82%
MAY '22 SOY MEAL $ / TON 356.8 353.6 353.8 -2.5 -0.70%
JUL '22 SOY MEAL $ / TON 359.5 356.6 357.6 -1.4 -0.39%
DEC '21 Chicago SRW $ / BSH  7.9975 7.99 7.99 0.045 0.57%
MAR '22 Chicago SRW $ / BSH  8.12 7.985 7.9875 -0.05 -0.62%
MAY '22 Chicago SRW $ / BSH  8.1775 8.0425 8.045 -0.05 -0.62%
JUL '22 Chicago SRW $ / BSH  8.015 7.895 7.895 -0.0475 -0.60%
SEP '22 Chicago SRW $ / BSH  8.015 7.8925 7.91 -0.0375 -0.47%
DEC '21 Kansas City HRW $ / BSH  8.24 8.2 8.2 -0.02 -0.24%
MAR '22 Kansas City HRW $ / BSH  8.34 8.1975 8.2025 -0.04 -0.49%
MAY '22 Kansas City HRW $ / BSH  8.3325 8.205 8.205 -0.0425 -0.52%
JUL '22 Kansas City HRW $ / BSH  8.2175 8.09 8.09 -0.035 -0.43%
SEP '22 Kansas City HRW $ / BSH  8.215 8.0875 8.09 -0.025 -0.31%
DEC '21 MLPS Spring Wheat $ / BSH  10.4725 10.2925 10.4725 0.11 1.06%
MAR '22 MLPS Spring Wheat $ / BSH  10.29 10.16 10.18 -0.0275 -0.27%
MAY '22 MLPS Spring Wheat $ / BSH  10.1525 10.0475 10.0475 -0.04 -0.40%
JUL '22 MLPS Spring Wheat $ / BSH  9.875 9.7275 9.75 -0.02 -0.20%
SEP '22 MLPS Spring Wheat $ / BSH  9.23 9.145 9.145 -0.015 -0.16%
DEC '21 ICE Dollar Index $ 96.38 96.14 96.165 0.051 0.05%
 JA '21 Light Crude $ / BBL  68.64 66.72 68.32 2.06 3.11%
 FE '21 Light Crude $ / BBL  68.43 66.62 68.14 2.04 3.09%
JAN '22 ULS Diesel $ /U GAL 2.1529 2.106 2.1454 0.047 2.24%
FEB '22 ULS Diesel $ /U GAL 2.1433 2.1005 2.1361 0.047 2.25%
JAN '22 Gasoline $ /U GAL 2.0075 1.965 2.0017 0.0488 2.50%
FEB '22 Gasoline $ /U GAL 1.9938 1.9557 1.9885 0.0483 2.49%
JAN '22 Feeder Cattle $ / CWT 0 #N/A 164.125 0 0.00%
MAR '22 Feeder Cattle $ / CWT 0 #N/A 167.1 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 137.675 0 0.00%
 FE '21 Live Cattle $ / CWT 0 #N/A 138.95 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 74 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 81.5 0 0.00%
DEC '21 Class III Milk $ / CWT 18.75 18.65 18.73 0.13 0.70%
JAN '22 Class III Milk $ / CWT 18.85 18.77 18.85 0.08 0.43%
FEB '22 Class III Milk $ / CWT 19.12 19.09 19.12 0.17 0.90%

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