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Morning Market Review for June 14, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Grains tumble hard on weather shifts. (Comments are updated by 7:30 a.m. Central Time.)

Corn, soy also dealt a heavy blow as the outlook for biofuels grows uncertain

  • Corn down 20-30 cents
  • Soybeans down 28-39 cents, soyoil down $2.801/lb, soymeal down $4.90/ton
  • Wheat down 19-28 cents

*Prices as of 6:50 am CDT.

Good Morning! Want to see how crop conditions on your farm stacks up against others across the country? Click here to take our ongoing farmer survey on crop progress at any point in the 2021 grain season. Our Google Map, updated daily, provides all past responses for farm readers.

Crop Progress Report out today: Rains in the Northern Plains and Eastern Corn Belt last week could provide some relief to corn, soybean, and spring wheat conditions in today’s weekly Crop Progress update from USDA.

But expect heat stress in the Northern Plains and Upper Midwest to continue to loom large over crop conditions in today’s report. Severe storms were also forecast in the Northern Plains late last week, which could not fully be evaluated until next week’s report. Plus, more hot and dry weather is expected over the next week and a half, which could further stress crops already suffering in the heat.

Hard red winter wheat harvest continues to hit roadblocks in Texas and Oklahoma amidst scattered showers and high humidity over the past week. Early test reports from Oklahoma point to variable yields (35-65 bushels per acre) and average protein levels (11.5%). Kansas will likely post its first week of harvest progress in today’s report as test cuttings were reported last week in U.S. Wheat Associate’s Weekly Harvest Report.

Soft red winter wheat harvest is progressing more quickly in the Southeast, with approximately 5% of anticipated 2021 acreage harvested as of last Friday. Alabama (28%), Arkansas (11%), North Carolina, (10%), Virginia (6%), and Tennessee (4%) are already underway with harvest activity

Hot and dry weather expected over the next week will likely quicken maturation rates for winter wheat crops across the country, though scattered showers over the weekend likely gave the crop a yield-saving boost. USDA expects 2021 winter wheat production to rise 2% from last year to 1.31 billion bushels.

Last week’s Crop Progress report saw corn conditions slip 4% from the week prior to 72% good to excellent. Analysts predicted soybean conditions 3% higher than USDA’s initial reading of the 2021 season – 67% good to excellent – sending soybean futures higher following the report’s release last week.

Spring wheat conditions fell 5% lower to 38% good to excellent last week as Minneapolis futures rallied. Early winter wheat harvest rates of 2% complete trailed behind the five-year average of 7% for the same period, though the delays due to cool and wet weather could largely be offset by favorable yields down the road.

To sum it up, expect a little more of the same of last week’s Crop Progress report in today’s report.

Corn

Despite another week and a half of hot and dry weather, the prospect for a cool and wet end to June traded high in investors’ minds this morning, sending corn futures $0.20-$0.30/bushel lower.

A Reuters report from Friday presented the possibility that biofuel blending for fossil fuels may not be as widely supported by the current presidential administration as previously expected, further weighing on prices in the corn complex as demand forecasts grow increasingly murky.

Despite optimistic weekly ethanol production readings over the past month, producers could face a new challenge in the coming future. A Reuters report released last Friday suggests that President Biden’s Administration is considering ways to help U.S. refiners find relief from biofuel blending mandates.

The Biden Administration, who also announced planned revisions to Navigable Waters Protection Rule regulations implemented during the Trump era on Wednesday, has actively rolled back President Trump’s significant expansion of blending exemption waivers for refiners during its first few months in office, so the news is somewhat of a shock to the agriculture industry.

The RIN credits refiners are required to by as part of the Renewable Fuel Standard have soared to the highest prices on record as of late, compounding to the oil industry’s headaches over the past year during which time the pandemic ate away at consumer fuel demand and oil companies’ profits.

Energy prices rose this morning due in large part to the Reuters report. Corn prices have rallied in recent weeks thanks to expanding ethanol production capacity and recovering consumer fuel demand in the wake of pandemic-driven reduced demand over the past year. A policy that would limit further ethanol demand by refiners could reverse some of the gains the corn market has clawed back from the pandemic.

Soybeans

Soybean futures fell $0.28-$0.39/bushel lower this morning on worries about the future of U.S. biofuel blending opportunities and the sudden weather forecast revision.

"Just how much importance the market is placing on U.S. corn and soybeans getting more rain is shown by the sharp drop in prices today” StoneX commodity risk manager Matt Ammerman told Reuters this morning. “But extended weather forecasts can be changed so the dryness issue is not over yet."

Peak export season for soybeans is long past, but that doesn’t mean that bullish prospects are off the table for U.S. soybean growers. Despite a bearish June 2021 WASDE report that saw slowing soybean crush rates through the remainder of the 2020/21 marketing year, prospects for a smaller than expected crop continue to support prices.

Regardless of supply dynamics, farmers will need to keep an eye on soybean demand as harvest nears. In my latest E-corn-omics column, I point out that exports are forecast lower for the 2021/22 marketing year compared to a year prior, but there is still a strong chance U.S. soybean processors are going to need to compete with exporters for bushels this year, especially as U.S. biofuel capacity increases.

Soy growers caught in the middle of exporters and domestic processors could come out on top as a result.

Wheat

A weaker dollar provided little solace to the wheat complex this morning as falling corn and soybean prices compounded with higher production forecasts out of Russia and favorable growing conditions in the European Union, limiting the complex’s gains in the early morning hours.

Despite some cold snap concerns earlier this spring, plentiful rains in May have boosted winter wheat conditions in Russia and also improved spring wheat growing conditions in Russia’s central and western regions, according to new data released by Russian agricultural consultancy Sovecon overnight.

Sovecon now estimates the 2021 Russian wheat crop at 3.03 billion bushels, 55 million bushels higher than previous estimates. Dry weather in key spring wheat growing regions, including Siberia and the Urals, could limit Russia’s 2021 wheat output, despite favorable wheat growing conditions elsewhere in Russia.

Russia’s winter wheat harvest is expected to begin at the end of the month. Russia is the world’s largest wheat exporter. Middle East and African countries are typically the top destinations for Russian wheat.

Weather

Mostly clear skies are forecast across the Midwest and Plains today as temperatures heat up into the high 80s and 90s, according to NOAA’s short-range forecasts. Scattered showers are possible today in the Upper Plains, though total accumulation over the next 24 hours is not likely to top a half inch.

Financials

Coronavirus cases in the U.S. rose to 33,462,286 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 599,769 deaths as of press time. Both metrics have slowed considerably as vaccination rates rise and life begins to return to more normal patterns.

According to the CDC, over 52% of the total U.S. population has received at least one COVID-19 vaccine. Nearly 144 million Americans (43%) are fully vaccinated. Over 2.3 billion vaccine doses have been administered worldwide.

Happy Monday! Want to catch up on last week’s WASDE updates and ongoing weather issues? We’ve rounded up a list of last week’s top ag marketing headlines to start your week out on the right foot. Plus – a few other stories from the ag community last week that should be on your radar. Have a good week!

The S&P 500 closed at a new high on Friday afternoon and is currently on pace to set new records today as the stock index climbed on improving global pandemic recovery hopes. A COVID-19 vaccine from Novavax is purported to be 90.4% effective, which could help speed up global vaccination and subsequent economic recovery rates.

Brent crude oil traded at its highest level since 2018 this morning as the push for green energy and post-pandemic demand surge fueled supply shortage concerns. OPEC production cuts around the globe and reduced spending on fossil fuel projects in the U.S. also weighed heavily on traders’ minds this morning, sending West Texas Intermediate futures $0.37/barrel higher to $71.28.

Strong central bank support across the world also helped stabilize financial this morning. S&P 500 futures inched 0.04% higher to $4,238.25 on the overarching sentiments.

Morning Ag Commodity Prices - 6/14/2021
Contract Units High Low Last Net Change % Change
JUL '21 CORN $ / BSH  6.7625 6.53 6.6425 -0.2025 -2.96%
SEP '21 CORN $ / BSH  6.1925 5.935 6.02 -0.2775 -4.41%
DEC '21 CORN $ / BSH  5.9875 5.705 5.805 -0.2925 -4.80%
MAR '22 CORN $ / BSH  6.0425 5.775 5.8575 -0.3025 -4.91%
MAY '22 CORN $ / BSH  6.08 5.875 5.9025 -0.2925 -4.72%
JUL '22 CORN $ / BSH  6.0825 5.83 5.91 -0.285 -4.60%
SEP '22 CORN $ / BSH  5.3975 5.2025 5.2725 -0.1975 -3.61%
JUL '21 SOYBEANS $ / BSH  15.0425 14.7225 14.7975 -0.2875 -1.91%
AUG '21 SOYBEANS $ / BSH  14.8025 14.4125 14.4825 -0.3425 -2.31%
SEP '21 SOYBEANS $ / BSH  14.3975 14 14.0725 -0.4025 -2.78%
NOV '21 SOYBEANS $ / BSH  14.305 13.9 13.9925 -0.395 -2.75%
JAN '22 SOYBEANS $ / BSH  14.2975 13.935 14.0075 -0.3975 -2.76%
MAR '22 SOYBEANS $ / BSH  14.0675 13.7375 13.8 -0.35 -2.47%
MAY '22 SOYBEANS $ / BSH  14.02 13.705 13.8 -0.2925 -2.08%
JUL '22 SOYBEANS $ / BSH  13.995 13.725 13.8 -0.3025 -2.15%
AUG '22 SOYBEANS $ / BSH  13.685 #N/A 13.9075 0 0.00%
JUL '21 SOYBEAN OIL  $ / LB 66.41 63.76 63.96 -3.02 -4.51%
AUG '21 SOYBEAN OIL  $ / LB 65.34 62.35 62.43 -3.22 -4.90%
JUL '21 SOY MEAL $ / TON 383.9 377.9 378.4 -4.9 -1.28%
AUG '21 SOY MEAL $ / TON 386.6 380.8 381.2 -4.8 -1.24%
SEP '21 SOY MEAL $ / TON 389.1 383.3 383.7 -5.1 -1.31%
OCT '21 SOY MEAL $ / TON 390.8 382.6 385.6 -4.7 -1.20%
DEC '21 SOY MEAL $ / TON 396.2 389.2 390.1 -5.4 -1.37%
JUL '21 Chicago SRW $ / BSH  6.8075 6.5875 6.61 -0.1975 -2.90%
SEP '21 Chicago SRW $ / BSH  6.8575 6.635 6.66 -0.1975 -2.88%
DEC '21 Chicago SRW $ / BSH  6.935 6.7125 6.725 -0.2075 -2.99%
MAR '22 Chicago SRW $ / BSH  6.9875 6.7825 6.8 -0.2 -2.86%
MAY '22 Chicago SRW $ / BSH  6.915 6.7925 6.8 -0.21 -3.00%
JUL '21 Kansas City HRW $ / BSH  6.365 6.1425 6.16 -0.22 -3.45%
SEP '21 Kansas City HRW $ / BSH  6.4275 6.2225 6.2425 -0.215 -3.33%
DEC '21 Kansas City HRW $ / BSH  6.51 6.3175 6.33 -0.215 -3.28%
MAR '22 Kansas City HRW $ / BSH  6.5975 6.42 6.42 -0.2125 -3.20%
MAY '22 Kansas City HRW $ / BSH  6.6 6.5 6.5 -0.1875 -2.80%
JUL '21 MLPS Spring Wheat $ / BSH  7.6 7.365 7.37 -0.2775 -3.63%
SEP '21 MLPS Spring Wheat $ / BSH  7.64 7.44 7.44 -0.2725 -3.53%
DEC '21 MLPS Spring Wheat $ / BSH  7.6525 7.48 7.5125 -0.2325 -3.00%
MAR '22 MLPS Spring Wheat $ / BSH  7.63 7.52 7.5675 -0.19 -2.45%
MAY '22 MLPS Spring Wheat $ / BSH  7.655 #N/A 7.7575 0 0.00%
JUN '21 ICE Dollar Index $ 90.565 90.485 90.505 -0.045 -0.05%
 JU '21 Light Crude $ / BBL  71.7 70.65 71.27 0.36 0.51%
 AU '21 Light Crude $ / BBL  71.36 70.36 70.93 0.33 0.47%
JUL '21 ULS Diesel $ /U GAL 2.1422 2.1146 2.1264 0.0057 0.27%
AUG '21 ULS Diesel $ /U GAL 2.1442 2.1219 2.1294 0.0057 0.27%
JUL '21 Gasoline $ /U GAL 2.2163 2.179 2.1959 0.0098 0.45%
AUG '21 Gasoline $ /U GAL 2.2157 2.1822 2.1968 0.0104 0.48%
AUG '21 Feeder Cattle $ / CWT 0 #N/A 151.175 0 0.00%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 153.525 0 0.00%
 JU '21 Live Cattle $ / CWT 0 #N/A 118.7 0 0.00%
 AU '21 Live Cattle $ / CWT 0 #N/A 120.025 0 0.00%
JUN '21 Live Hogs $ / CWT 0 #N/A 122.675 0 0.00%
JUL '21 Live Hogs $ / CWT 0 #N/A 119.975 0 0.00%
JUN '21 Class III Milk $ / CWT 17.23 #N/A 17.25 0 0.00%
JUL '21 Class III Milk $ / CWT 17.59 17.54 17.56 0.03 0.17%
AUG '21 Class III Milk $ / CWT 18.34 #N/A 18.41 0 0.00%
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