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Morning Market Review for December 8, 2021

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Grains ease on caution ahead of USDA reports. (Comments are updated by 7:30 a.m. Central Time.)

Plus – October 2021 export data sets new record high though individual commodity performance remains nuanced

  • Corn down 1-3 cents
  • Soybeans down 6-10 cents; Soymeal down $0.50/ton; Soyoil down $1.70/lb
  • Chicago wheat down 4-7 cents; Kansas City wheat down 5-7 cents; Minneapolis wheat down 1-2 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

Good morning! USDA’s Foreign Agricultural Service, in conjunction with the U.S. Commerce Department, released updated U.S. ag export data for October 2021 yesterday. And there were a lot of reasons for farmers to be happy.

$17.6 million worth of them, to be exact. That’s the monetary value of October 2021 ag export shipments, which is the highest value of the 2021 calendar year and the highest nominal monthly value for exports on record due in large part to soaring commodity prices.

China was the top buyer of U.S. ag products in October 2021 by a long shot, purchasing $5.2 billion worth of U.S. ag stocks. Mexico ($2.3B) and Canada ($2.2B) were a distant second and third, respectively.

Oilseeds and derived products were the top dollar item shipped in October, which comes as no surprise as the month is historically when the top volumes of high-dollar soybean sales are shipped into international channels. Nearly $6.4 billion worth of oilseeds and related products were shipped in October 2021 while other cereal grains and feeds totaled a mere $2.9 billion.

Calendar-year-to-date exports totaled $142.1 billion. October is historically one of the top months for U.S. ag shipments though it is also not at all unusual for November shipments to top those. At any rate, high commodity values are likely to leave 2021 ag exports in the record books this year.

And with two months left in the 2021 calendar year, 2021 is likely to best 2014 ($154.5B) and 2020 ($149.7B) as the largest year for U.S. export shipments by value.

Corn

Corn futures traded $0.01-$0.03/bushel lower this morning as optimism from better-than-expected biofuel blending cuts waned overnight. Omicron concerns and last minute trader positioning ahead of tomorrow’s WASDE reports also limited gains in the overnight trading session.

The big news in the ag world yesterday centered around the Biden Administration’s release of biofuel blending requirements for 2020-2022, the first time the administration’s Environmental Protection Agency (EPA) has issued any formal guidance on its stance towards biofuels.

However, neither the oil industry nor the ag/biofuel industry was pleased with the Biden EPA’s ruling that blending rates would be scaled back from previous levels due in large part to the COVID-19 pandemic.

2020 blending volumes were retroactively set at 17.13 billion gallons, down from pre-pandemic volumes previously set at 20.09 billion gallons. 2021 volumes were set at 18.52 billion gallons and 2022 blending volumes were projected at 20.77 billion gallons.

Previous blending volumes outlined by the EPA in 2019 pegged 2021 volumes at 19.92 billion gallons though the newly issued 2022 volumes released yesterday were an increase from pre-pandemic blending mandates.

But it wasn’t just gloom and doom for U.S. farmers who have long awaited updated blending mandates. The EPA will also reject 65 small refinery waiver requests for blending exemptions. The previous administration had allowed a dramatic increase in these waivers, limiting biofuel blending volumes in the lead-up to the pandemic.

Even with lower 2020 and 2021 blending requirements, the rejection of small refinery waivers stands to be a more significant ruling than the actual volumes. And the cuts were actually smaller than the markets had previously believed, allowing the price for RINs to increase to $0.95/RIN from Tuesday morning’s yearly low of $0.80/RIN.

USDA also announced $700 million in retroactive grants to biofuel producers impacted by the COVID-19 pandemic.

Soybeans

Soybean futures fell $0.06-$0.11/bushel this morning on lower oil prices and underperforming soybean export volumes in October 2021 (despite the record-setting dollar value for U.S. ag exports set in October 2021).

"Weaker than expected export performance could lead to a slight increase in U.S. wheat and soybean stocks," consultancy Agritel told Reuters this morning of tomorrow’s USDA report. "The market is also waiting for a better knowledge of crop conditions in South America for the next few weeks."

Improving weather forecasts in South America also contributed to weakness in the soy complex overnight, though dry weather concerns remain omnipresent in Southern Brazil.

Wheat

Wheat prices also stumbled this morning despite a weakening dollar. Market watchers are awaiting fresh USDA and Australian harvest data, with preemptive concerns pointing to stock increases.

Weather

Slightly warmer temperatures will blanket the Heartland today, according to NOAA’s short-range forecasts. Mostly clear skies are forecast across the Midwest and Plains today.

Financials

S&P 500 futures traded 14 points (0.3%) higher to $4,699 this morning on optimism surrounding vaccine resiliency and the recent development of several COVID-19 treatments. Pfizer issued a report overnight stating that a third dose of its vaccine does in fact neutralize the omicron variant, providing more protection against the virus’ latest mutation.

Energy complex prices increased as worries about the omicron variant continue to wane.

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

  • Wild swings seem like the rule rather than the exception these days in everything from stocks to soybeans. Bryce Knorr has insights on how to manage the volatility.
  • 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 - 12/8/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.8525 5.85 5.85 -0.0125 -0.21%
MAR '22 CORN $ / BSH  5.865 5.8325 5.84 -0.02 -0.34%
MAY '22 CORN $ / BSH  5.885 5.855 5.8625 -0.0225 -0.38%
JUL '22 CORN $ / BSH  5.885 5.855 5.86 -0.025 -0.42%
SEP '22 CORN $ / BSH  5.6525 5.625 5.63 -0.025 -0.44%
DEC '22 CORN $ / BSH  5.545 5.52 5.52 -0.03 -0.54%
MAR '23 CORN $ / BSH  5.61 5.595 5.6025 -0.02 -0.36%
JAN '22 SOYBEANS $ / BSH  12.525 12.3825 12.3975 -0.105 -0.84%
MAR '22 SOYBEANS $ / BSH  12.6025 12.4675 12.48 -0.1025 -0.81%
MAY '22 SOYBEANS $ / BSH  12.675 12.545 12.5625 -0.0925 -0.73%
JUL '22 SOYBEANS $ / BSH  12.735 12.615 12.625 -0.0975 -0.77%
AUG '22 SOYBEANS $ / BSH  12.635 12.57 12.57 -0.0825 -0.65%
SEP '22 SOYBEANS $ / BSH  12.455 12.3575 12.375 -0.07 -0.56%
NOV '22 SOYBEANS $ / BSH  12.33 12.24 12.2475 -0.07 -0.57%
JAN '23 SOYBEANS $ / BSH  12.33 12.2575 12.2575 -0.0625 -0.51%
MAR '23 SOYBEANS $ / BSH  12.15 12.0925 12.095 -0.0425 -0.35%
DEC '21 SOYBEAN OIL  $ / LB 0 #N/A 57.04 0 0.00%
JAN '22 SOYBEAN OIL  $ / LB 57 55.3 55.48 -1.62 -2.84%
DEC '21 SOY MEAL $ / TON 358.9 358.4 358.4 -0.5 -0.14%
JAN '22 SOY MEAL $ / TON 350.8 347.2 347.7 -2 -0.57%
MAR '22 SOY MEAL $ / TON 350.1 346.9 347.5 -1.8 -0.52%
MAY '22 SOY MEAL $ / TON 351.2 348.8 349.3 -1.4 -0.40%
JUL '22 SOY MEAL $ / TON 354.3 351.8 352.5 -1.2 -0.34%
DEC '21 Chicago SRW $ / BSH  7.9925 7.9925 7.9925 0 0.00%
MAR '22 Chicago SRW $ / BSH  8.12 8.0025 8.03 -0.055 -0.68%
MAY '22 Chicago SRW $ / BSH  8.17 8.0525 8.0825 -0.05 -0.61%
JUL '22 Chicago SRW $ / BSH  8.0375 7.94 7.96 -0.055 -0.69%
SEP '22 Chicago SRW $ / BSH  8.0425 7.955 7.97 -0.0525 -0.65%
DEC '21 Kansas City HRW $ / BSH  0 #N/A 8.2725 0 0.00%
MAR '22 Kansas City HRW $ / BSH  8.3 8.195 8.2225 -0.0525 -0.63%
MAY '22 Kansas City HRW $ / BSH  8.3075 8.2075 8.235 -0.05 -0.60%
JUL '22 Kansas City HRW $ / BSH  8.19 8.1025 8.13 -0.0525 -0.64%
SEP '22 Kansas City HRW $ / BSH  8.2075 8.1225 8.135 -0.065 -0.79%
DEC '21 MLPS Spring Wheat $ / BSH  0 #N/A 10.4575 0 0.00%
MAR '22 MLPS Spring Wheat $ / BSH  10.3975 10.33 10.3525 -0.0125 -0.12%
MAY '22 MLPS Spring Wheat $ / BSH  10.225 10.2 10.21 -0.015 -0.15%
JUL '22 MLPS Spring Wheat $ / BSH  9.9 9.85 9.85 -0.0275 -0.28%
SEP '22 MLPS Spring Wheat $ / BSH  9.2 9.1475 9.1475 -0.0525 -0.57%
DEC '21 ICE Dollar Index $ 96.38 96.13 96.23 -0.14 -0.15%
 JA '21 Light Crude $ / BBL  72.79 70.91 72.2 0.15 0.21%
 FE '21 Light Crude $ / BBL  72.6 70.74 71.99 0.15 0.21%
JAN '22 ULS Diesel $ /U GAL 2.2644 2.2127 2.253 0.0284 1.28%
FEB '22 ULS Diesel $ /U GAL 2.2577 2.2062 2.2444 0.0268 1.21%
JAN '22 Gasoline $ /U GAL 2.1421 2.0946 2.1264 0.0264 1.26%
FEB '22 Gasoline $ /U GAL 2.127 2.0803 2.1103 0.0239 1.15%
JAN '22 Feeder Cattle $ / CWT 0 #N/A 165.025 0 0.00%
MAR '22 Feeder Cattle $ / CWT 0 #N/A 167.475 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 138.225 0 0.00%
 FE '21 Live Cattle $ / CWT 0 #N/A 139.225 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 72.075 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 76.55 0 0.00%
DEC '21 Class III Milk $ / CWT 18.72 18.7 18.72 0.01 0.05%
JAN '22 Class III Milk $ / CWT 19.66 19.48 19.48 -0.06 -0.31%
FEB '22 Class III Milk $ / CWT 19.83 19.74 19.83 0.12 0.61%

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