Morning Market Review for November 29, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Wheat recoups Friday’s losses. (Comments are updated by 7:30 a.m. Central Time.)

Corn wavers, while soy inches up on bargain buying

Plus – my latest crop scouting report following my Thanksgiving road trip across the Midwest

  • Corn unchanged to 1 cent lower
  • Soybeans up 6-8 cents; Soymeal up $4.70/ton; Soyoil up $0.38/lb
  • Chicago wheat up 5-6 cents; Kansas City wheat up 9-11 cents; Minneapolis wheat up 9-12 cents

*Prices as of 6:50am CST.

Last Crop Progress report of 2022 due out today

Harvest is largely finished up for the 2021 growing season across the country, so after today’s report USDA will discontinue its weekly Crop Progress report until the 2022 season picks back up on April 4, 2022.

Even amid a wide array of issues during the growing season, corn and soybean harvest progress remains largely ahead of historical benchmarks as the season comes to a close. As of last week (November 21), 95% of corn and soybean crops across the U.S. had been harvested, 3% and 1% ahead of the five-year average, respectively.

Most winter wheat crops are in the ground across the country, and though California and North Carolina appear to be the chief holdouts, planting progress in those states remains ahead of five-year benchmarks.

About 86% of those newly sown plants have emerged, slightly behind historical targets thanks to dry conditions on the Plains. Winter wheat conditions fell 2% last week, with only 44% of the crop in good to excellent condition as of November 21.

I just travelled back to my home in Colorado after spending the holiday with my family in Northwestern Illinois. Apparently, half of the state of Colorado also joined my husband and me as we trekked back to the Centennial State across I-80 from the Thanksgiving festivities! As always, I’m a sucker for a good crop tour and the I-80 view did not disappoint, even this late in the year.

I was surprised to see several fields in Western Iowa and Eastern Nebraska still standing with few or no combines in sight. Giant piles of corn awaited shipment or consumption next to the Missouri River in Omaha. We watched a combine crew in Western Nebraska chip away at a corn field last night. And we saw lots of patches of green across Eastern Colorado as 2022 winter wheat crops awaited winter dormancy.

Around Northwestern Illinois and Southwester Wisconsin, anhydrous ammonia tool bars were tearing up fields like crazy despite the holiday festivities. We visited with friends and family who work in ag retail and suggested supply scarcity is beginning to be realized.

Anhydrous applications (by my dad’s estimate) are likely double this year in the region compared to last as farmers stave off [even] higher prices and potential shortages next spring. Some regional terminals are starting to run out of anhydrous, though rain over the weekend and looming winter weather may slow application rates for the 2022 calendar year.

Also – a lot of winter wheat was sown in Southern Wisconsin this fall. As the 2022 acreage debate looms, the global supply tightening of wheat stocks is likely to add yet another complexity in rotation decisions for next year.

At my family’s farm, my dad proudly showed my husband and I the tillage radishes and purple top turnips a neighboring farmer had drilled into the fields after chopping corn in September for our cover crop rotation for the winter. The turnips were larger than softballs, which will go a long way in retaining soil moisture, organic matter, and keeping the grazing cows (and deer, my hunter husband gleefully pointed out) happy.

Farming remains a profitable endeavor in the short run, but growers are not taking their margins for granted as they reflect over the past two years and look to 2022’s unknowns with understandable trepidation.

Corn

Corn futures wobbled as market watchers evaluated potential economic risks to global recovery following the discovery of the new COVID-19 variant, omicron. Chicago futures prices were unchanged to a penny lower at last glance, though losses are likely capped by strong export prospects from last week’s Export Sales report and a recovery to energy markets this morning.

Soybeans

Soybean futures rose $0.06-$0.07/bushel this morning as market players engaged in a round of bargain buying while awaiting fresh insights from the newly discovered omicron variant of COVID-19. Domestic demand continues to prop up gains in the soymeal market, which rose over 1% in pre-market trading.

China’s sow herd was 6.6% higher than year ago volumes, but the herd size notched another month of smaller monthly volumes. China’s sow herd has been shrinking since July of this year after a massive rebuilding effort oversupplied the market following the 2018 African swine fever (ASF) outbreak that more than halved China’s pig herd.

Soybean planting in Brazil is now 91% complete, according to Brazilian agricultural consultancy Safras & Mercado. The total is 8% higher than the previous week and nearly 5% higher than the five-year benchmark. Crop conditions continue to benefit from fall showers, particularly in top-producing state Mato Grosso.

But dry conditions in the far south state of Rio Grande do Sul threatens to trigger a round of replanting if soil moisture levels remain depleted. Market analysts expect Brazil will plant as much as 100.8 million acres of soybeans this fall, yielding over 5.3 billion bushels for the 2021/22 campaign.

Wheat

Strong import demand across the globe propelled prices in the U.S. wheat complex higher this morning. Chicago wheat recovered Friday’s losses despite a higher dollar. Dry conditions on the U.S. Plains pulled Kansas City futures closer to the $9/bushel benchmark while demand for high protein wheat varieties lifted Minneapolis futures $0.10-$0.12/bushel higher.

Wheat export data from France, the European Union’s largest wheat producer, continues to remain incomplete due to technical errors. France’s export data has not been updated since July 2021.

The E.U. is the world’s second largest wheat exporter, so the transparency issue continues to create forecasting issues for global bodies who rely on the supply and demand information for pricing decisions.

Weather

Mostly clear skies are forecast for the Midwest today, according to NOAA’s short-range forecasts. A chance of a wintery precipitation mix will remain in place through this evening along the shores of Lake Michigan, though any accumulation is not likely to top a quarter inch.

Financials

As traders return back to the office today following last week’s holiday, Wall Street recovered some of Friday’s losses after news of the latest COVID-19 variant, omicron, emerged from South Africa. The news triggered a massive selloff in the markets as worries about economic recovery took a dark turn backwards. To be sure, volatility can have greater market impacts during the holiday season when many market players are out of the office.

But the severity of the omicron variant is not yet widely known. The omicron variant has a mutation in its spike protein, which threatens to weaken immune responses from vaccines and other available treatments. But little data currently exists about its rate of infection though anecdotal evidence suggests that it could be more transmissible than previous variants due to the mutated spike protein.

Scientists estimate it will take about two weeks to determine the severity of omicron. During that time, expect rapid market fluctuations as new updates emerge and global economic outlooks are reevaluated.

Black Friday sales soared 48% higher than last year, though remained lower than 2019 volumes. Inflationary concerns are expected to take a toll on Cyber Monday today and other online holiday purchases over the weekend.

But stock markets ticked up this morning, with S&P 500 futures gaining 0.75% to $4,630.00 at last glance. While Friday’s losses will not likely be recouped quickly, comments from Federal Reserve Chairman Jerome Powell as well as manufacturing and home sale data expected today could help ease market upheaval.

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

Morning Ag Commodity Prices - 11/29/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.8825 5.8325 5.8575 -0.01 -0.17%
MAR '22 CORN $ / BSH  5.94 5.885 5.915 -0.0025 -0.04%
MAY '22 CORN $ / BSH  5.975 5.9225 5.9525 -0.0025 -0.04%
JUL '22 CORN $ / BSH  5.9825 5.93 5.96 0 0.00%
SEP '22 CORN $ / BSH  5.73 5.69 5.7125 -0.01 -0.17%
DEC '22 CORN $ / BSH  5.63 5.6 5.61 -0.015 -0.27%
MAR '23 CORN $ / BSH  5.69 5.675 5.69 -0.005 -0.09%
JAN '22 SOYBEANS $ / BSH  12.685 12.57 12.5875 0.06 0.48%
MAR '22 SOYBEANS $ / BSH  12.7875 12.675 12.69 0.06 0.48%
MAY '22 SOYBEANS $ / BSH  12.8775 12.7675 12.7825 0.0575 0.45%
JUL '22 SOYBEANS $ / BSH  12.935 12.83 12.8325 0.045 0.35%
AUG '22 SOYBEANS $ / BSH  12.8675 12.79 12.81 0.0675 0.53%
SEP '22 SOYBEANS $ / BSH  12.655 12.555 12.555 0.02 0.16%
NOV '22 SOYBEANS $ / BSH  12.525 12.4025 12.4125 0.01 0.08%
JAN '23 SOYBEANS $ / BSH  12.5 12.4 12.4 -0.0025 -0.02%
MAR '23 SOYBEANS $ / BSH  12.2725 12.1975 12.1975 0.005 0.04%
DEC '21 SOYBEAN OIL  $ / LB 60.31 59.09 59.23 0.21 0.36%
JAN '22 SOYBEAN OIL  $ / LB 60.25 59 59.17 0.29 0.49%
DEC '21 SOY MEAL $ / TON 362.9 357.6 360.4 4.2 1.18%
JAN '22 SOY MEAL $ / TON 355.3 350.4 352.8 3.4 0.97%
MAR '22 SOY MEAL $ / TON 352.1 347.5 349.9 3.3 0.95%
MAY '22 SOY MEAL $ / TON 352.8 347.4 350.5 2.8 0.81%
JUL '22 SOY MEAL $ / TON 356.4 352.6 353.9 2.6 0.74%
DEC '21 Chicago SRW $ / BSH  8.405 8.31 8.3275 0.0725 0.88%
MAR '22 Chicago SRW $ / BSH  8.5525 8.45 8.465 0.0625 0.74%
MAY '22 Chicago SRW $ / BSH  8.6125 8.51 8.5275 0.0625 0.74%
JUL '22 Chicago SRW $ / BSH  8.46 8.35 8.3625 0.0225 0.27%
SEP '22 Chicago SRW $ / BSH  8.4075 8.3075 8.3225 0.0225 0.27%
DEC '21 Kansas City HRW $ / BSH  8.8175 8.745 8.77 0.12 1.39%
MAR '22 Kansas City HRW $ / BSH  8.85 8.765 8.7925 0.1025 1.18%
MAY '22 Kansas City HRW $ / BSH  8.82 8.7525 8.775 0.1 1.15%
JUL '22 Kansas City HRW $ / BSH  8.62 8.5275 8.55 0.0625 0.74%
SEP '22 Kansas City HRW $ / BSH  8.5525 8.495 8.495 0.05 0.59%
DEC '21 MLPS Spring Wheat $ / BSH  10.55 10.42 10.5025 0.1075 1.03%
MAR '22 MLPS Spring Wheat $ / BSH  10.65 10.52 10.59 0.105 1.00%
MAY '22 MLPS Spring Wheat $ / BSH  10.53 10.425 10.51 0.1175 1.13%
JUL '22 MLPS Spring Wheat $ / BSH  10.2425 10.08 10.165 0.06 0.59%
SEP '22 MLPS Spring Wheat $ / BSH  9.48 9.45 9.48 0.06 0.64%
DEC '21 ICE Dollar Index $ 96.36 96.145 96.21 0.106 0.11%
 JA '21 Light Crude $ / BBL  72.16 69.2 71.69 3.54 5.19%
 FE '21 Light Crude $ / BBL  71.83 68.4 71.33 3.49 5.14%
DEC '21 ULS Diesel $ /U GAL 2.2032 2.0945 2.1989 0.1044 4.98%
JAN '22 ULS Diesel $ /U GAL 2.2003 2.1055 2.1953 0.1046 5.00%
DEC '21 Gasoline $ /U GAL 2.1502 2.0785 2.1446 0.1152 5.68%
JAN '22 Gasoline $ /U GAL 2.1004 2.006 2.0934 0.1123 5.67%
JAN '22 Feeder Cattle $ / CWT 0 #N/A 167.15 0 0.00%
MAR '22 Feeder Cattle $ / CWT 0 #N/A 167.975 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 138.1 0 0.00%
 FE '21 Live Cattle $ / CWT 0 #N/A 141.2 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 73.2 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 81.025 0 0.00%
NOV '21 Class III Milk $ / CWT 18.03 18.03 18.03 0.08 0.45%
DEC '21 Class III Milk $ / CWT 18.32 17.9 18.03 -0.29 -1.58%
JAN '22 Class III Milk $ / CWT 18.55 18.2 18.25 -0.39 -2.09%

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