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Morning Market Review for July 30, 2021

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Moderate temperatures trigger corn, soy losses. (Comments are updated by 7:30 a.m. Central Time.)

Plus – a quick look at fertilizer prices on the rise

  • Corn down 5-7 cents
  • Soybeans down 12-15 cents, soymeal down $0.70/ton, soyoil down $0.52/lb
  • Wheat down 5-14 cents

*Prices as of 6:50 am CDT.

Good Morning!  More moderate temperatures are on the horizon for the Corn Belt. How are your crops surviving the heat? Click here to take our ongoing Feedback from the Field survey on 2021 crop conditions. Our Google Map, updated daily, provides all past responses for farm readers. Check out our latest Feedback from the Field analysis to see the most recent farmer comments from around the country.

A quick look at input costs

China’s top fertilizer producers are temporarily suspending phosphate and urea exports, which could send key buyers India and Pakistan in search of alternative sources the U.S. has come to rely on in the wake of its countervailing tariff dispute with Russia and Morocco.

China is the world’s largest producer of phosphate. Leading up to this announcement, there was some optimism that Chinese supplies could help offset phosphate shortages in the U.S. as phosphate imports from key producers Russia and Morocco all but vanished following the tariff enforcement.

Fertilizer costs have hit record levels this year in China as a government-sponsored acreage expansion increased the demand for inputs. Recent flooding in central China’s Henan province has also stalled fertilizer production. Rising production costs and increased export demand due to a global acreage increase this year have also played a significant role in dwindling Chinese phosphate supplies.

USDA-IL Dept of Ag Market News ServiceChart of IL biweekly fertilizer production cost.

The USDA’s Illinois Department of Ag Market News Service released it’s bi-weekly report on farm-level input costs yesterday and its latest update had little good news for farmers. Potash prices skyrocketed from the previous report, up nearly a quarter over the past two weeks to $600/ton.

The latest potash price surge is largely attributed to recent economic sanctions enforced on key producer Belarus by the European Union, United Kingdom, U.S., and Canada after the Belarus government imprisoned high-profile political protestors.

Potash suppliers were already tight leading up to the sanctions, which will further restrict international flows of the potassium fertilizer. It remains unclear if U.S. producers Nutrien and Mosaic will have the capacity to rachet up production in time for fall application season.

Countervailing tariff disputes continued to lead phosphate prices higher. New UAN dumping disputes levied against Russia and Trinidad and Tobago by the U.S. sent prices climbing over the past two weeks and could spur UAN prices higher as well.

Global nitrogen supplies continue to tighten as global acreage expansion climbs during this era of high commodity prices. Growers awaiting spring pricing in the coming weeks will need to pencil out 2022 profit and cost expectations pretty rapidly in the next couple weeks to decide if availability is worth the current high costs of inputs or if they can afford to take a gamble and wait for prices to moderate in the increasingly volatile post-pandemic era.

Corn

The European Commission lowered its forecast for corn imports into the EU during the 2021/22 marketing year on increased production forecasts. Cooler temperatures and showers in the Upper Midwest expected today also helped lower prices overnight.

Soybeans

Soybean prices fell $0.10-$0.12/bushel as temperatures in the drought-plagued Upper Midwest moderated. Showers in the Upper Midwest expected later today will likely benefit the crop as pollination looms in the early days of August. A little export optimism from yesterday’s weekly Export Sales report from USDA helped to cap the morning’s losses.

Wheat

Higher 2021/22 wheat production estimates for the European Union issued overnight by the European Commission relieved trader concerns about tight supplies for the 2021/22 marketing year, sending wheat futures prices in the U.S. lower. Losses were limited by drought concerns for the Russian and American wheat crops.

The International Grains Council (IGC) released slimmed down estimates for 2021/22 global wheat production yesterday. Persistent drought in the Canadian prairies and U.S. Northern Plains was the key driver behind the monthly forecast’s reduction. A crop report from Saskatchewan’s government website noted that any rainfall at this point will have no effect on yields but will go a long way to replenishing soil moisture levels for next year.

IGC does expect better than anticipated yields from the European Union despite untimely rains during peak winter wheat harvest activities. The IGC now forecasts 2021/22 global wheat production at 28.95 billion bushels, down nearly 37 million bushels from its previous month’s estimate. The ICG also increased its 2021/22 global corn forecast by 39 million bushels to 47.3 billion bushels.

The Wheat Quality Council’s (WQC) spring wheat tour just came to a close, with crop scouts confirming below average 2021 spring wheat yields due to drought in the Northern Plains. While conditions varied across fields, the WQC ultimately landed on an estimate of 29.1 bushel per acre – the lowest measured yield observed on the tour since 1993.

USDA’s current national yield estimate for 2021 spring wheat stands at 28.0 bushels per acre. North Dakota is the country’s largest spring wheat producer.

Weather

Cooler temperatures are moving into the Upper Midwest as showers from earlier this week move out, according to NOAA’s short-range forecasts. Temperatures will likely fall into the 80’s in the Upper Midwest by this afternoon, though blistering temperatures will likely remain in place in the Southern Plains. The cooldown bodes well for crops – especially corn crops that are entering into peak pollination activity this week.

The showers will shift into the Missouri River Valley today. South Dakota, Eastern Nebraska, Iowa, and Northern Missouri could see up to two inches of rain over the next 24 hours.

Updated Drought Monitor data released yesterday saw nation-wide drought conditions ease slightly, falling over half a percent to show 53.54% of the country in some sort of abnormally dry to drought condition.

Scattered shower across the Midwest through the week ending July 27 helped to alleviate dry conditions, as the drought ratings for the region slipped half a percent to 34.3% of acreage reporting dry to drought conditions.

Nearly 72% of acreage in the High Plains are reporting dry to drought conditions, down fractionally from the previous week. Around a third of cattle, corn, and soybean producing areas across the country are experiencing drought.

droughtmonitor.unl.edudrought monitor chart of the U.S.

Financials

Coronavirus cases in the U.S. rose to 34,754,668 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 612,129 deaths as of press time.

According to the CDC, 69% of U.S. adults have received at least one COVID-19 vaccine. Nearly 164 million Americans (49%) are fully vaccinated. Over 4 billion vaccine doses have been administered worldwide.

Morning Ag Commodity Prices - 7/30/2021
Contract Units High Low Last Net Change % Change
SEP '21 CORN $ / BSH  5.5775 5.5325 5.545 -0.035 -0.63%
DEC '21 CORN $ / BSH  5.56 5.5075 5.52 -0.045 -0.81%
MAR '22 CORN $ / BSH  5.635 5.5875 5.595 -0.0475 -0.84%
MAY '22 CORN $ / BSH  5.6775 5.6325 5.64 -0.0475 -0.84%
JUL '22 CORN $ / BSH  5.6775 5.635 5.6375 -0.0475 -0.84%
SEP '22 CORN $ / BSH  5.1675 5.12 5.1275 -0.04 -0.77%
DEC '22 CORN $ / BSH  5.005 4.9725 4.98 -0.0325 -0.65%
AUG '21 SOYBEANS $ / BSH  14.41 14.2775 14.2775 -0.065 -0.45%
SEP '21 SOYBEANS $ / BSH  13.8725 13.7225 13.7425 -0.11 -0.79%
NOV '21 SOYBEANS $ / BSH  13.8075 13.65 13.6675 -0.11 -0.80%
JAN '22 SOYBEANS $ / BSH  13.8475 13.6975 13.7125 -0.1075 -0.78%
MAR '22 SOYBEANS $ / BSH  13.7375 13.605 13.6275 -0.09 -0.66%
MAY '22 SOYBEANS $ / BSH  13.67 13.5875 13.59 -0.085 -0.62%
JUL '22 SOYBEANS $ / BSH  13.64 13.545 13.5475 -0.1 -0.73%
AUG '22 SOYBEANS $ / BSH  13.4175 #N/A 13.45 0 0.00%
SEP '22 SOYBEANS $ / BSH  12.7825 #N/A 12.975 0 0.00%
AUG '21 SOYBEAN OIL  $ / LB 66.75 66.35 66.41 -0.52 -0.78%
SEP '21 SOYBEAN OIL  $ / LB 66.4 65.21 65.4 -0.82 -1.24%
AUG '21 SOY MEAL $ / TON 359.3 356.5 356.5 0 0.00%
SEP '21 SOY MEAL $ / TON 359 355.2 356.3 -0.2 -0.06%
OCT '21 SOY MEAL $ / TON 357.8 354.1 355.3 -0.4 -0.11%
DEC '21 SOY MEAL $ / TON 361.5 357.6 358.7 -0.7 -0.19%
JAN '22 SOY MEAL $ / TON 361.8 358 359.3 -0.6 -0.17%
SEP '21 Chicago SRW $ / BSH  7.105 6.975 6.9925 -0.06 -0.85%
DEC '21 Chicago SRW $ / BSH  7.185 7.0575 7.0725 -0.065 -0.91%
MAR '22 Chicago SRW $ / BSH  7.25 7.125 7.14 -0.0675 -0.94%
MAY '22 Chicago SRW $ / BSH  7.215 7.12 7.1275 -0.07 -0.97%
JUL '22 Chicago SRW $ / BSH  7.035 6.9275 6.93 -0.0775 -1.11%
SEP '21 Kansas City HRW $ / BSH  6.7825 6.68 6.69 -0.055 -0.82%
DEC '21 Kansas City HRW $ / BSH  6.89 6.785 6.795 -0.0575 -0.84%
MAR '22 Kansas City HRW $ / BSH  6.96 6.865 6.865 -0.0575 -0.83%
MAY '22 Kansas City HRW $ / BSH  6.92 6.915 6.915 -0.0275 -0.40%
JUL '22 Kansas City HRW $ / BSH  6.8025 6.7325 6.7325 -0.065 -0.96%
SEP '21 MLPS Spring Wheat $ / BSH  9.175 9.0275 9.045 -0.14 -1.52%
DEC '21 MLPS Spring Wheat $ / BSH  9.025 8.875 8.9 -0.1325 -1.47%
MAR '22 MLPS Spring Wheat $ / BSH  8.8175 8.7225 8.7225 -0.15 -1.69%
MAY '22 MLPS Spring Wheat $ / BSH  8.67 8.595 8.595 -0.1225 -1.41%
JUL '22 MLPS Spring Wheat $ / BSH  0 #N/A 8.5375 0 0.00%
SEP '21 ICE Dollar Index $ 92.015 91.78 91.915 0.044 0.05%
 SE '21 Light Crude $ / BBL  73.62 72.93 73.43 -0.19 -0.26%
 OC '21 Light Crude $ / BBL  72.98 72.3 72.79 -0.19 -0.26%
AUG '21 ULS Diesel $ /U GAL 2.185 2.174 2.183 -0.0064 -0.29%
SEP '21 ULS Diesel $ /U GAL 2.1924 2.1759 2.1849 -0.0072 -0.33%
AUG '21 Gasoline $ /U GAL 2.35 2.3395 2.3489 -0.0025 -0.11%
SEP '21 Gasoline $ /U GAL 2.3262 2.3071 2.3178 -0.0073 -0.31%
AUG '21 Feeder Cattle $ / CWT 0 #N/A 158.5 0 0.00%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 161.95 0 0.00%
 AU '21 Live Cattle $ / CWT 0 #N/A 122.5 0 0.00%
 OC '21 Live Cattle $ / CWT 0 #N/A 128.15 0 0.00%
AUG '21 Live Hogs $ / CWT 0 #N/A 106.3 0 0.00%
OCT '21 Live Hogs $ / CWT 0 #N/A 88.975 0 0.00%
JUL '21 Class III Milk $ / CWT 16.47 #N/A 16.48 0 0.00%
AUG '21 Class III Milk $ / CWT 16.22 16.22 16.22 0 0.00%
SEP '21 Class III Milk $ / CWT 16.26 16.26 16.26 0 0.00%
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