Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
Markets-122316-scyther5-ThinkstockPhotos-2000 scyther5/Thinkstock

Morning Market Review for Oct. 22, 2020

Wheat edges lower on profit-taking, strengthening dollar. (Comments are updated by 7:30 a.m. Central Time.)

Corn and beans post small gains ahead of export data

  • Corn up 1 cent
  • Soybeans up 2-3 cents, soyoil up $0.34/lb, soybean meal up $0.3/ton
  • Chicago and Kansas City wheat down 3-5 cents; Minneapolis wheat up 1 cent

*Prices as of 6:55 am CDT.

Quote of the Day: A Central Illinois farmer reported “Good [corn] yield, but not as good as last year.” And in Kentucky, one corn grower “had one 105-acre field average 259 bpa, which is outstanding.” Check out our latest responses from the Feedback from the Field series to see how your farm stacks up against other growers’ harvest progress across the country.

How is harvest going on your farm? Click here to share your crop updates via a short survey. Results are updated daily in our interactive map so you can stay in the loop on harvest development across the country.

Corn

Corn prices inched up this morning on strong export demand, namely from China. December futures traded $0.01/bushel higher this morning to $4.1475 while March 2021 futures added $0.005/bushel to $4.1725.

Cash corn prices were largely higher across the Midwest yesterday end user competition worked their upward magic on prices. Farmer sales began to slow amid harvest delays that prevented newly harvested bushels from entering the demand pipeline.

Location

10/20/2020 Basis (in cents/bushel)

10/21/2020 Basis (in cents/bushel)

Daily Change

Elevators

     

   Cincinnati OH

-4

-3

1

   Burns Harbor IN

0

0

0

   Lincoln NE

-25

-25

0

   Chicago IL

-40

-40

0

   Council Bluffs IA (elevator)

-20

-20

0

Processors

     

   Chicago IL

27

27

0

   Decatur IL

0

0

0

   Cedar Rapids IA

-4

-6

-2

   Blair NE

-18

-16

2

River Terminals

     

   Toledo OH

-15

-15

0

   Seneca IL

-16

-10

6

   Savanna IL

-25

-19

6

   Davenport IA

-23

-12

11

   Morris IL

-45

-45

0

Rail

     

   Columbus OH

10

10

0

   Evansville IN

8

8

0

   Hereford TX

100

100

0

   Fort Worth TX

100

100

0

Ethanol Plants

     

   Linden IN

-30

-30

0

   Union City IN

0

5

5

   Annawan IL

-7

-7

0

   Council Bluffs IA

-22

-22

0

December futures price as base.

     

Source: Refinitiv

   

 

 

New crop corn export sales are expected to increase in this week’s Weekly Export Sales report from USDA released this morning. Trade estimates peg today’s sales total at 31.5 million – 55.1 million bushels. Despite a day of no sales data due to the governmental observance of the Columbus Day holiday, flash sales for the week ending October 15 totaled 20.9 million bushels. China accounted for the lion’s share of the sales, ordering 16.5 million bushels in the reporting period.

After two consecutive weeks of strengthening ethanol production reports, yesterday’s Weekly Petroleum Inventory Status report from the U.S. Energy Information Administration found shrinking weekly ethanol output. For the week ending October 16, ethanol production fell 1 million gallons/day or 2.6% to 38.3 million gallons/day. That translates to approximately 99.4 million bushels of corn consumed for ethanol feedstock during October 10 – 16.

Weekly stocks also tightened, signaling that production capacity is likely to remain at reduced levels as uncertainty surrounding rising COVID-19 cases and the upcoming presidential election weigh heavy on consumers’ minds. For the reporting week, stocks tightened 1.4% to 828.3 million gallons.

Gasoline demand notched a third straight week of declining interest as fuel consumption dropped 12.1 million gallons/day to 348.1 million gallons/day – the lowest weekly reading in 16 weeks. The drop in fuel demand may be a foreshadowing of weaker ethanol output in the weeks to come.

A group of Republican senators with voting bases largely dependent upon oil refineries requested on Wednesday the Environmental Protection Agency (EPA) consider allowing biofuels blending waivers for refineries still suffering from the fallout from collapsed energy demand due to the pandemic. Lawmakers leading the charge include Senators Ted Cruz (R – Texas) and Shelley Moore Capito (R – West Virginia). They have also argued for no increases in the 10% “blend wall” for ethanol in the fuel pool to reduce blending volumes.

Soybeans

Dry soil conditions in Brazil continued to add strength to U.S. soy prices this morning. Forecasts for rains over the weekend in South America growing regions could come in lighter than would be needed to restore depleted moisture levels. As of a week ago, nearly 8% of prospective soybean acres had been planted, doubling the area from the prior reporting week. November futures traded $0.035/bushel to $10.755 on the news, with December soyoil futures following $0.34/lb higher to $33.54 and December soymeal futures up $0.3/ton to $33.45.

Cash soybean prices strengthened at crush facilities and river terminals across the Midwest yesterday. Harvest delays slowed grain flows off the combine, reducing farmer sales despite rising soybean futures prices.

Location

10/20/2020 Basis (in cents/bushel)

10/21/2020 Basis (in cents/bushel)

Daily Change

Elevators

     

   Cincinnati OH

0

2

2

   Chicago IL

-5

-5

0

   Burns Harbor IN

-15

-15

0

Processors

     

   Decatur IL

10

10

0

   Decatur IN

-15

-10

5

   Morristown IN

-15

-10

5

   Lafayette IN

-12

-12

0

   Sioux City IA

-40

-40

0

   Des Moines IA

-30

-25

5

   Cedar Rapids IA

-30

-20

10

   Council Bluffs IA

-47

-47

0

   Lincoln NE

-30

-30

0

River Terminals

     

   Toledo OH

-12

-12

0

   Seneca IL

-25

-25

0

   Savanna IL

-24

-18

6

   Davenport IA

-29

-14

15

   Morris IL

-25

-25

0

Source: Refinitiv

     

November futures price as base.

     

 

Argentine soy processors continue to struggle following a 24-hour workers’ strike in which the Labor Ministry failed to meet the national oilseed workers’ demands for higher compensation. On Wednesday, a Bunge plant was forced to cease operations at a plant in San Lorenzo after an explosion late Tuesday night.

"No employees were injured, and the situation is under control,” a company spokesperson reported in an emailed statement. “We will be conducting a detailed investigation of the incident to determine the cause and when we can expect to safely resume operations." Repairs to the facility were already underway at the plant yesterday and the Terminal 6 port remains operating.

New crop export sales for soybeans are estimated to come in between 55.1 million – 91.9 million bushels, slightly higher than last week’s estimates. USDA announced 19.3 million bushels of daily flash sales to China in the October 9 – 15 reporting period and increasing Chinese demand is expected to drive export orders higher this week.

Today’s export loading paces for soybeans will likely showcase increasing demand from China. And it will be necessary for those shipping rates to continue if soybean futures have a shot at the $11/bushel benchmark. Export inspections to China dwarfed all other international buyers of U.S. soybeans in Monday’s weekly Export Inspections report from USDA. However, loading paces eased slightly in Monday’s report, foreshadowing a potential weekly decline in soybean export shipments in today’s Weekly Sales report.

Wheat

Contract

Price Change*

Price*

Chicago SRW – December Futures

-$0.045

$6.2525

Kansas City HRW – December Futures

-$0.0175

$5.68

Minneapolis HRS – December Futures

+$0.0175

$5.8425

Chicago and Kanas City wheat futures fell prey to a round of profit-taking overnight after Chicago wheat prices hit a six-year high yesterday. Light rains forecasted in the U.S. and Black Sea region this weekend will likely not be enough to replenish soil moisture conditions, setting a cap on this morning’s losses. The ICE Dollar Index strengthened 0.34% to $92.910 this morning.

Wheat export sales for the October 9 – 15 reporting week are likely to be slightly higher than last week based on slightly higher analyst estimates. Trade projections peg new crop export sales for the week at 7.3 million – 29.4 million bushels. USDA did not announce any daily flash sales during the reporting period.

Wheat Export shipments could shrink slightly in today’s report, though on average shipping paces are expected to continue to remain strong. Monday’s export inspections report found a 10.1-million-bushel decline to 8.8 million bushels in weekly loading paces for the week ending October 15.

But export volumes are currently constrained by high volumes of corn and soybeans loading out of U.S. port facilities, constricting the amount of wheat available to be shipped into export channels. Loading paces in today’s report may need to be taken with a grain of salt to account for these constraints, especially considering international food hoarding tendencies as of late.

Wheat prices are currently trading at multi-year highs across the board, but it’s not just because of dry planting conditions in the U.S. Plains. Shrinking exportable wheat stocks around the world and dry soils in Europe and Russia are all contributing to the upward swing in wheat prices despite record large ending stocks in 2021.

Food hoarding has breathed new life into the demand side of the economic equation in the wheat complex. Ending world stocks have risen 3.7% since 2020/21 projections were first outlined in the May 2020 WASDE report, to a record 11.8 billion bushels on increased stockpiling. China alone is expected to own over 51% of ending wheat stocks in 2020/21, rising 2% since May 2020 forecasts.

With Russian acreage facing as much as a 15% potential decline in planted acreage, there is little room in the growing schedule for any further weather stress for the global wheat crop. Speculative interest has increased dramatically in the wheat sector in recent months as traders seek hedges against inflation. As Chicago prices flirt with six-year highs and Kansas City and Minneapolis futures match late 2018 prices, wheat prices are leaving little room in fundamentals for downward price potential.

Weather

More snow and rain is on the way in the Northern Plains and Midwest, according to NOAA’s short-range forecasts. Up to 2 inches of accumulation is likely in Wisconsin today, where harvest remains at a standstill as farmers wait for clear skies to resume combining.

Financials

Coronavirus cases in the U.S. rose by 63,347 to 8,338,413 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 1,137 lives from yesterday to 222,220 deaths as of press time.

“What keeps you up at night?” This was a question we posed to readers in our August 2020 survey and found that producers had a lot to say about this matter. Executive Editor Mike Wilson digs into the responses in his latest This Business of Farming column, which range from worrisome to analytical to hysterically funny. My analysis found farmers to be most concerned about debt loads, grain prices, and health issues. But I also found a concerning number of farmers who were unable to sleep due to the neighbor’s dog barking…

U.S. stock futures slipped lower this morning on concerns that a vote would not be reached on a potential stimulus package in Congress until after the November 3 presidential election. Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi are expected to resume negotiations on a bill today. S&P 500 futures edged 0.20% lower to $3,425.75 as traders grow increasingly skeptical of a timely resolution.

Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish