Morning Market Review for June 17, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Rains in Upper Midwest tank corn, soy prices. (Comments are updated by 7:30 a.m. Central Time.)

A stronger dollar dashes hopes for gains in the wheat complex

  • Corn down 18-21 cents
  • Soybeans down 23-28 cents, soyoil down $2.42/lb, soymeal down $1.40/ton
  • Chicago & Kansas City wheat down 11-12 cents; Minneapolis wheat down 1-3 cents

*Prices as of 7:05 am CDT.

Feedback from the Field update: Farmers across the country watched the rising thermometer evaporate hopes for top end yields over the past week as heat stress, drought, and a cool planting season continue to hinder crop development. USDA’s weekly Crop Progress report on Monday confirmed those concerns as ratings for corn, soybeans, and spring wheat tumbled.

Drought is by large the most significant concern for farmers across the Heartland, though the severity varies. “Corn is rolling in the afternoon even on heavy ground. Never seen corn roll this early in the growing season even in 1988, 2012 drought years. Soybeans showing slow growth due to lack of moisture,” a Feedback from the Field respondent in North Central Iowa shared last week.

The latest Feedback from the Field recap is live on our website. Farmers have been willing and eager to share their crop conditions over the past several weeks and we include all of those insights from every corner of the Corn Belt in this week’s recap!

Want to see how crop conditions on your farm stack 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.

Corn

Rain is falling in Eastern Iowa this morning and corn futures are slipping just as quickly as a result. Futures prices in Chicago dropped over 3% ($0.18-$0.21/bushel) on the forecast, which is expected to bring up to an inch of rain to drought-stressed areas of the Upper Midwest. A stronger dollar also took a bite out of any hopes for upward price mobility in the corn complex this morning.

Corn exports are likely to see an uptick today, though volumes are likely to remain slightly off of record paces recorded earlier this spring as global buyers prepare for the Brazilian safrinha crop to come to market. Monday’s Grain Inspections for Export saw corn volumes weighed for international shipment rise 8% on the week to 60.8 million bushels.

At the Farm Futures Ag Business Summit yesterday, Renewable Fuels Association President and CEO Geoff Cooper offered some calming insights into the lingering concerns about the Biden Administration’s recent considerations of relaxing biofuel blending requirements for oil producers suffering losses amid fuel demand destruction during the pandemic.

The news came as a shock to the biofuel industry, who had battled additional demand destruction as a result of the previous administration’s excessive use of biofuel blending waivers. “We had four years of waivers. We are confident the Biden Administration does not want to repeat that,” Cooper shared.

Despite federal legislators from Delaware attempting to coerce President Biden into providing some relief to local energy companies, Democratic lawmakers across the Corn Belt sent a letter to President Biden yesterday expressing their concern for RFS waivers, especially as it relates to combatting climate change.

"We're grateful to these congressional champions for standing up for our nation's producers of low-carbon ethanol and other renewable fuels," Cooper in a separate statement.

And ethanol production is not showing signs of slowing down anytime soon as profit margins soar. “Some of our margins are the best we’ve seen in years,” said Kelly Nieuwenhuis, an Iowa corn grower and president of SEC, a 72-million-gallon ethanol plant in Sioux Center, Iowa, at yesterday’s Farm Futures Business Summit.

Weekly ethanol production has returned to pre-pandemic volumes amid the growing profit margins over the past month, with yesterday’s weekly Petroleum Inventory Status report from the U.S. Energy Information Administration finding 43 million gallons/day of output last week.

Soybeans

With little support expected by this morning’s export report, soybeans continued their sixth session of lower prices overnight as demand rationing and the recent biofuel scare takes a bite out of soybean futures. Rainfall in the Upper Midwest this morning also took a toll on prices, sending futures $0.23-$0.28/bushel lower overnight.

Subsoil moisture is all the rage these days and with good reason, writes Commstock Investment’s Matthew Kruse.

“Markets are focused entirely on forecast rain chances and cooler temps, selling in anticipation,” he shares in the latest Ag Marketing IQ column.

“They are selling the rumor so the market will have the rain built in before it falls. It is going to take a lot of rain and a significant pattern change to end the drought. In the markets defense, forecast conditions are the best they have been with two systems showing potential to bring rain to dry soils soon. The market is reflecting that.”

With tight global supplies, Kruse estimates that a single inch of rain is not likely to reverse drought conditions or crop damage. And with global grain demand soaring, “there is no ‘cushion’ available to offset anything less than a good U.S. crop,” Kruse concludes.

Wheat

A rallying dollar put a dent in Chicago and Kansas City wheat futures overnight, sending both complexes $0.11-0.12/bushel lower as the Greenback strengthened on updated Federal Reserve guidance regarding interest rates yesterday.

The global wheat market also took a hit on rising prospects for wheat exports out of Russia, Ukraine, and Kazakhstan, alleviating some earlier supply concerns as global wheat consumption continues to rise.

Minneapolis futures fared better, only shedding $0.01-$0.03/bushel overnight with dry conditions in the Northern Plains somewhat offsetting losses from a stronger dollar.

Wheat exports could show new signs of life in the first major reporting week for the 2021/22 marketing year in today’s export sales report. Monday’s Grain Inspections for Export saw wheat volumes weighed for international shipment ease slightly, by 3%, through the week ending June 10 to 17.5 million bushels.

While it was a slight decrease from last week’s paces, the total volume remains consistent with seasonally higher levels of exports from U.S. wheat growers.

Weather

More hot temperatures are expected across the Midwest and Plains again today, according to NOAA’s short-range forecasts. Scattered showers are expected across the Upper Mississippi River Valley today, with over an inch of precipitation expected in the drought-plagued region over the next 24 hours.

Financials

Coronavirus cases in the U.S. rose to 33,499,190 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 600,656 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, nearly 53% of the total U.S. population has received at least one COVID-19 vaccine. Over 146 million Americans (44%) are fully vaccinated. Over 2.4 billion vaccine doses have been administered worldwide.

U.S. stock markets are trading lower this morning after yesterday’s updated Federal Reserve outlook that hinted that it may start raising interest rates in 2023 – earlier than markets were previously expecting. The dollar continued rallying overnight on the news after posting its largest gain in over a year – 0.8% - yesterday. S&P 500 futures fell 0.23% on the sentiments to $4,203.50.

Morning Ag Commodity Prices - 6/17/2021
Contract Units High Low Last Net Change % Change
JUL '21 CORN $ / BSH  6.7425 6.52 6.525 -0.205 -3.05%
SEP '21 CORN $ / BSH  5.895 5.6675 5.6725 -0.2125 -3.61%
DEC '21 CORN $ / BSH  5.7325 5.5275 5.5325 -0.1925 -3.36%
MAR '22 CORN $ / BSH  5.795 5.5975 5.6 -0.195 -3.36%
MAY '22 CORN $ / BSH  5.8175 5.6475 5.6475 -0.1875 -3.21%
JUL '22 CORN $ / BSH  5.845 5.65 5.65 -0.1875 -3.21%
SEP '22 CORN $ / BSH  5.2 5.1 5.1025 -0.115 -2.20%
JUL '21 SOYBEANS $ / BSH  14.5 14.235 14.2575 -0.2275 -1.57%
AUG '21 SOYBEANS $ / BSH  14.0025 13.74 13.7625 -0.2575 -1.84%
SEP '21 SOYBEANS $ / BSH  13.55 13.28 13.295 -0.28 -2.06%
NOV '21 SOYBEANS $ / BSH  13.41 13.14 13.1475 -0.285 -2.12%
JAN '22 SOYBEANS $ / BSH  13.435 13.1775 13.185 -0.2775 -2.06%
MAR '22 SOYBEANS $ / BSH  13.2475 13.0025 13.0225 -0.2525 -1.90%
MAY '22 SOYBEANS $ / BSH  13.22 12.985 13.0025 -0.24 -1.81%
JUL '22 SOYBEANS $ / BSH  13.2525 13.025 13.035 -0.2375 -1.79%
AUG '22 SOYBEANS $ / BSH  13.0325 13.0275 13.0275 -0.07 -0.53%
JUL '21 SOYBEAN OIL  $ / LB 62.2 59.29 59.65 -2.42 -3.90%
AUG '21 SOYBEAN OIL  $ / LB 59.82 56.58 56.9 -2.94 -4.91%
JUL '21 SOY MEAL $ / TON 379.9 376.7 377.5 -1.7 -0.45%
AUG '21 SOY MEAL $ / TON 380 377.1 377.9 -1.8 -0.47%
SEP '21 SOY MEAL $ / TON 381.4 378 379 -1.6 -0.42%
OCT '21 SOY MEAL $ / TON 380.4 377.4 378.2 -1.9 -0.50%
DEC '21 SOY MEAL $ / TON 383.8 380.1 380.8 -2.3 -0.60%
JUL '21 Chicago SRW $ / BSH  6.67 6.52 6.5225 -0.105 -1.58%
SEP '21 Chicago SRW $ / BSH  6.7 6.545 6.5475 -0.11 -1.65%
DEC '21 Chicago SRW $ / BSH  6.76 6.61 6.61 -0.11 -1.64%
MAR '22 Chicago SRW $ / BSH  6.825 6.675 6.675 -0.1125 -1.66%
MAY '22 Chicago SRW $ / BSH  6.8275 6.7275 6.735 -0.07 -1.03%
JUL '21 Kansas City HRW $ / BSH  6.1325 5.9775 5.9775 -0.13 -2.13%
SEP '21 Kansas City HRW $ / BSH  6.2225 6.0575 6.0625 -0.13 -2.10%
DEC '21 Kansas City HRW $ / BSH  6.3175 6.1625 6.1625 -0.1225 -1.95%
MAR '22 Kansas City HRW $ / BSH  6.41 6.27 6.27 -0.1125 -1.76%
MAY '22 Kansas City HRW $ / BSH  6.4325 6.355 6.355 -0.0925 -1.43%
JUL '21 MLPS Spring Wheat $ / BSH  7.69 7.5325 7.57 -0.0325 -0.43%
SEP '21 MLPS Spring Wheat $ / BSH  7.7625 7.6 7.635 -0.03 -0.39%
DEC '21 MLPS Spring Wheat $ / BSH  7.7275 7.6125 7.63 -0.025 -0.33%
MAR '22 MLPS Spring Wheat $ / BSH  7.6675 7.6 7.6 -0.045 -0.59%
MAY '22 MLPS Spring Wheat $ / BSH  7.6725 #N/A 7.6175 0 0.00%
SEP '21 ICE Dollar Index $ 91.83 91.285 91.765 0.557 0.61%
 JU '21 Light Crude $ / BBL  72.29 71.33 72.03 -0.12 -0.17%
 AU '21 Light Crude $ / BBL  72.1 71.13 71.82 -0.13 -0.18%
JUL '21 ULS Diesel $ /U GAL 2.1002 2.0774 2.0982 -0.0052 -0.25%
AUG '21 ULS Diesel $ /U GAL 2.1025 2.0803 2.1009 -0.0048 -0.23%
JUL '21 Gasoline $ /U GAL 2.1636 2.1307 2.1621 0.0059 0.27%
AUG '21 Gasoline $ /U GAL 2.1674 2.1356 2.1658 0.0058 0.27%
AUG '21 Feeder Cattle $ / CWT 0 #N/A 157.7 0 0.00%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 159.8 0 0.00%
 JU '21 Live Cattle $ / CWT 0 #N/A 122.3 0 0.00%
 AU '21 Live Cattle $ / CWT 0 #N/A 124.925 0 0.00%
JUL '21 Live Hogs $ / CWT 0 #N/A 115.5 0 0.00%
AUG '21 Live Hogs $ / CWT 0 #N/A 111.7 0 0.00%
JUN '21 Class III Milk $ / CWT 17.33 17.29 17.29 0.04 0.23%
JUL '21 Class III Milk $ / CWT 17.11 16.99 16.99 0.02 0.12%
AUG '21 Class III Milk $ / CWT 17.7 #N/A 17.69 0 0.00%
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