Morning Market Review for December 7, 2021

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Grains mixed ahead of Thursday’s WASDE reports. (Comments are updated by 7:30 a.m. Central Time.)

Another quiet night on the overnight desk as new market data is anticipated

  • Corn unchanged to down 1 cent
  • Soybeans mixed; Soymeal down $1.50/ton; Soyoil up $0.56/lb
  • Chicago wheat down 3 cents; Kansas City wheat unchanged; Minneapolis wheat up 2 cents

*Prices as of 6:50am 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

It was another night of quiet market activity as holiday trading volumes begin to wane and market players await Thursday’s WASDE update from USDA. Corn futures wavered within a penny of gains and losses overnight on the lack of new news.

Some price support was realized by dry weather in South America. Easing omicron variant concerns prevented any further market destruction, which bodes well for the corn complex ahead of Thursday’s WASDE reports.

Soybeans

Old crop soybeans were unchanged to $0.01-$0.03/bushel lower as traders anticipated USDA data. New crop soybeans traded $0.01-$0.02/bushel higher overnight on dry forecasts in Southern Brazil and Argentina and bullish soy import data released from China’s customs administration overnight.

Soyoil rose after Chinese customs data saw an uptick in soyoil imports during November 2021. Tightening Malaysian palm oil supplies strengthened competing palm oil prices overnight while the rally in the energy markets also continued, adding more price support to overnight gains.

Data out overnight from China’s customs administration showed China’s soybean imports to be up 68% in November from the previous month. China is the world’s largest importer of soybeans.

In November 2021, China imported 314.9 million bushels of soybeans, up 127.1 million bushels from October 2021 import volumes after U.S. soybean exporters were able to fully recover terminal operations at the Gulf of Mexico following damage inflicted to the region by Hurricane Ida.

So far in the 2021 calendar year, China has imported 3.2 billion bushels of soybeans. November 2021 soybean import volumes were down nearly 12% from year-ago shipments as low crush margins in China continue to plague processors and reduce demand for the oilseed.

Hog margins have risen over the past month in Southwestern China, but hog production in China as a whole remains at an oversaturated volume ahead of the new year. China’s farm ministry expects pig prices to remain deflated unless production is substantially reduced in the coming months.

On the other side of the coin, the world’s largest producer and exporter of soybeans, Brazil, is just about finished planting another record-breaking crop.

Agribusiness consultancy AgRural expects that 94% of the country’s soybean crop was successfully planted as of last Thursday. Early crop development is favorable in most regions of the country, though a dry spell in Brazil’s southern states has raised some market concern.

Below average rainfall in Rio Grande do Sul and Santa Catarina in the south paired with a dry first half of December could not only hurt soybean yield prospects, but it could also limit second crop corn production in the region as well.

Brazil is expected to harvest 5.3 billion bushels of soybeans this year, according to recent USDA data. Harvest in Mato Grosso, Brazil’s largest soybean-producing state, is slated to begin around Christmas.

Wheat

Despite tenders issued overnight from the Philippines and Japan, the wheat complex was mixed in early morning trade, likely due to the absence of investment funds in the marketplace after last week’s selloff.

Traders are likely awaiting guidance from the Russian government on its export quota and export tax for wheat shipments to determine how future trade flows will be impacted. Chicago wheat fell $0.03-$0.04/bushel as the dollar strengthened, Kansas City wheat was largely unchanged, and Minneapolis wheat added $0.02/bushel on competitive global demand for high-protein wheat varieties.

France, the European Union’s largest wheat producer, announced overnight that its 2022 soft wheat planted area will likely be lower than that of a year prior despite soaring wheat futures prices. The French farm ministry projects 12.2 million acres of soft wheat were planted this fall in France, down 1% from 2021 acreage.

Surging prices for fertilizers and chemicals in addition to rapid price increases for competing rapeseed (canola) and barley crops in France limited an acreage expansion for soft wheat this year. The E.U. is likely to best Russia as the world’s top wheat exporter this year after massive crop shortfalls in the Northern Hemisphere this past summer.

Weather

The weather is starting to act more like winter this week, according to NOAA’s short-range forecasts. Chances of scattered flurries will move east over the Great Lakes region today, coaxed into the Eastern Corn Belt by a low-pressure front while a chance of rain blankets the Southeast.

Any precipitation that accumulates in either region is likely to be light.

Financials

S&P 500 futures soared 59 points higher (+1.29%) to $4,649 on easing omicron fears and more measures from China to stimulate economic growth.

“There is a markedly more constructive tone to global markets,” Simon Ballard, chief economist at First Abu Dhabi Bank, told Bloomberg this morning. “The subliminal message is that the panic rush toward the risk asset exit door last week was an over-reaction.”

Gains were capped by omicron spread rates and geopolitical tension between the U.S. and Russia as Russia looks to invade Ukraine. U.S. President Biden and Russian President Putin are expected to discuss the matter via phone call today.

The U.S. also announced a diplomatic ban of the 2022 Beijing Winter Olympics, to which China has forewarned it would retaliate against the U.S.

Also worth a read on our website, FarmFutures.com:

  • What made you fall in love with farming? Darren Frye notes this is an important acknowledgement to improve management skills.
  • The 2022 Acreage Battle has already begun. Naomi Blohm offers insights on how it will shake out.
  • Net farm income is slated to rise 23% annually in 2021 in the U.S. thanks to higher commodity prices
  • Mark your calendars for January 20-21 – the next Farm Futures Business Summit!
Morning Ag Commodity Prices - 12/7/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.865 5.815 5.82 -0.015 -0.26%
MAR '22 CORN $ / BSH  5.8725 5.8225 5.835 0 0.00%
MAY '22 CORN $ / BSH  5.895 5.85 5.86 0 0.00%
JUL '22 CORN $ / BSH  5.89 5.845 5.8575 0 0.00%
SEP '22 CORN $ / BSH  5.645 5.6075 5.62 -0.0075 -0.13%
DEC '22 CORN $ / BSH  5.5425 5.5075 5.515 -0.01 -0.18%
MAR '23 CORN $ / BSH  5.6075 5.585 5.585 -0.0125 -0.22%
JAN '22 SOYBEANS $ / BSH  12.685 12.575 12.59 -0.025 -0.20%
MAR '22 SOYBEANS $ / BSH  12.755 12.65 12.67 0.005 0.04%
MAY '22 SOYBEANS $ / BSH  12.8225 12.72 12.7375 0 0.00%
JUL '22 SOYBEANS $ / BSH  12.88 12.79 12.805 0 0.00%
AUG '22 SOYBEANS $ / BSH  12.775 12.715 12.7175 -0.0075 -0.06%
SEP '22 SOYBEANS $ / BSH  12.5575 12.485 12.485 -0.005 -0.04%
NOV '22 SOYBEANS $ / BSH  12.3975 12.32 12.3425 0.01 0.08%
JAN '23 SOYBEANS $ / BSH  12.3475 12.3175 12.33 -0.005 -0.04%
MAR '23 SOYBEANS $ / BSH  12.1625 12.115 12.1225 -0.005 -0.04%
DEC '21 SOYBEAN OIL  $ / LB 58.35 58.34 58.35 0.56 0.97%
JAN '22 SOYBEAN OIL  $ / LB 58.69 57.91 58.57 0.71 1.23%
DEC '21 SOY MEAL $ / TON 359.3 #N/A 359.7 0 0.00%
JAN '22 SOY MEAL $ / TON 353.6 350.2 350.7 -1.9 -0.54%
MAR '22 SOY MEAL $ / TON 352 349 349.4 -1.5 -0.43%
MAY '22 SOY MEAL $ / TON 353.1 350.4 350.8 -1.4 -0.40%
JUL '22 SOY MEAL $ / TON 356.1 353.6 354 -1.3 -0.37%
DEC '21 Chicago SRW $ / BSH  8.12 8.11 8.12 0.15 1.88%
MAR '22 Chicago SRW $ / BSH  8.135 8.02 8.0225 -0.04 -0.50%
MAY '22 Chicago SRW $ / BSH  8.18 8.07 8.07 -0.0425 -0.52%
JUL '22 Chicago SRW $ / BSH  8.055 7.9575 7.9575 -0.03 -0.38%
SEP '22 Chicago SRW $ / BSH  8.05 7.9625 7.9725 -0.0175 -0.22%
DEC '21 Kansas City HRW $ / BSH  8.21 8.21 8.21 -0.005 -0.06%
MAR '22 Kansas City HRW $ / BSH  8.3125 8.2025 8.2225 -0.0025 -0.03%
MAY '22 Kansas City HRW $ / BSH  8.325 8.22 8.24 -0.0025 -0.03%
JUL '22 Kansas City HRW $ / BSH  8.2125 8.12 8.135 -0.015 -0.18%
SEP '22 Kansas City HRW $ / BSH  8.22 8.135 8.1475 -0.0125 -0.15%
DEC '21 MLPS Spring Wheat $ / BSH  0 #N/A 10.415 0 0.00%
MAR '22 MLPS Spring Wheat $ / BSH  10.345 10.235 10.3 0.0225 0.22%
MAY '22 MLPS Spring Wheat $ / BSH  10.22 10.1525 10.18 0.0225 0.22%
JUL '22 MLPS Spring Wheat $ / BSH  9.875 9.8425 9.8425 0.02 0.20%
SEP '22 MLPS Spring Wheat $ / BSH  9.2 9.15 9.15 -0.02 -0.22%
DEC '21 ICE Dollar Index $ 96.44 96.17 96.415 0.085 0.09%
 JA '21 Light Crude $ / BBL  71.93 69.52 71.58 2.09 3.01%
 FE '21 Light Crude $ / BBL  71.65 69.28 71.3 2 2.89%
JAN '22 ULS Diesel $ /U GAL 2.2276 2.1747 2.2166 0.0454 2.09%
FEB '22 ULS Diesel $ /U GAL 2.2181 2.1677 2.2075 0.0448 2.07%
JAN '22 Gasoline $ /U GAL 2.1061 2.0535 2.0956 0.0523 2.56%
FEB '22 Gasoline $ /U GAL 2.0897 2.0385 2.0781 0.0498 2.46%
JAN '22 Feeder Cattle $ / CWT 0 #N/A 165.25 0 0.00%
MAR '22 Feeder Cattle $ / CWT 0 #N/A 167.95 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 138.175 0 0.00%
 FE '21 Live Cattle $ / CWT 0 #N/A 139.65 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 72.05 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 78.225 0 0.00%
DEC '21 Class III Milk $ / CWT 18.74 18.65 18.65 -0.01 -0.05%
JAN '22 Class III Milk $ / CWT 19.3 19.25 19.3 0.12 0.63%
FEB '22 Class III Milk $ / CWT 19.36 19.35 19.36 0.08 0.41%

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