Morning Market Review for October 18, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Soy posts first loss in three sessions. (Comments are updated by 7:30 a.m. Central Time.)

Export optimism not enough to overcome weak domestic usage rates

  • Corn down 1 cent
  • Soybeans down 2-5 cents; Soymeal down $1.90/ton; Soyoil down $0.03/lb
  • Chicago wheat down 1-2 cents; Kansas City & Minneapolis wheat mixed

*Prices as of 7:10am CDT.

Good Morning! How is harvest progressing on your farm? Tell us all about it! Click here to take our ongoing Feedback from the Field survey on 2021 crop conditions to share your harvest progress (or hunting plans!). Our Google Map, updated daily, provides all past responses for farm readers, from farmers.

Crop Progress report out today

Happy Monday, Farm Futures readers! I was out of the office late last week to travel back to the Midwest for a childhood friend’s wedding. We spent the weekend in Michigan and Indiana, and even though I was on vacation I still gathered some good ag and crop intel for you this morning.

In Lansing, we stopped at the Michigan State University Dairy Store for ice cream. We also checked out the MSU Dairy Store processing center and nerded out over their cheese making process (I worked at one of the world’s largest mozzarella processing plants for two years before taking this position. And grew up on a dairy farm. Old habits die hard.).

Then we drove down to my alma mater, Purdue University. There was not a lot of corn left standing in Southwest Michigan and the beans remaining to be combined looked to be in good shape.

After stopping at Fair Oaks Farms for the world’s best grilled cheese sandwiches (my husband’s mind was blown!) and of course to scope out their processing display, calf barn, and impressive setup, we posted up at Harry’s Chocolate Shop to watch Purdue upset formerly number two ranked Iowa on Saturday. What a game – Boiler up!!

After breakfast at Triple XXX yesterday, we took the backroads back to I-65 to fly back home. I was surprised to see how much corn is left standing in the fields outside of West Lafayette and even more surprised at the wind damage it has faced.

There were many fields where corn stalks were barely upright and several bean fields consisting of slightly goosenecked plants. Harvest still has a ways to go along the I-65 corridor. I imagine the extra wind damage will add more time to the region’s harvest campaign this fall though it did not look like the many farmers I saw out harvesting had any intentions of slowing down soon.

The trip painted a perfect picture of the wide condition and yield variability farmers across the Corn Belt are experiencing this year. I was previously puzzled as to why markets were so convinced that this year’s corn crop had faced more damage than the record-setting soybean crop.

But my dad has also been quick to remind me about stalk health all growing season. Northwestern Indiana was the perfect reminder that this is the time of year when varieties with strong stalk traits are finally paying off. Of course, providing even those traits could stand up to late season wind gusts.

Slow-moving rain systems over the Midwest and Plains last week will likely narrow the gap between rapid harvest paces and five-year average benchmarks in today’s report.

Last week’s Crop Progress report saw 41% of U.S. corn acres harvested as of October 10. In that same period, 49% of soybean acres had been combined. Both rates stood between 9%-10% higher than the five-year average for the same reporting period.

With over 50% of the soybean crop harvested, we should also be looking to an uptick for export paces in the U.S. Gulf in today’s Grains Inspection for Export report from USDA’s Agricultural Marketing Service (AMS). Weekly shipping volumes have been significantly lower than last year due to export terminal damage following Hurricane Ida as well as lower Chinese buying paces compared to a year ago.

Winter wheat sowing continues to plow full steam ahead in the Pacific Northwest and Northern Plains. Last week’s Crop Progress report saw 61% of anticipated 2022 winter wheat acres planted, slightly ahead of market forecasts.

As harvest activity begins to taper off in the Midwest, soft red winter wheat sowing could see an uptick as farmers’ workloads free up. That could boost planting progress rates in today’s reports.

Corn

Slower than anticipated corn harvest rates in France and Ukraine are likely to open the door for U.S. corn exporters in the coming weeks. But gains are likely capped by expectations for larger U.S. and global corn supplies. Nearby December 2021 futures last traded a quarter of a penny lower to $5.2525/bushel on the sentiments.

Author’s note: The program I use to track corn prices is not functioning properly this morning. Click here for the most up-to-date information on corn futures pricing. I apologize for any inconvenience it may cause you this morning.

Soybeans

September crush volumes came in below market expectations on Friday, sending futures prices this morning down for the first time in three trading sessions. The cooling domestic demand for soybeans largely offset three consecutive days of large daily export sales reports of soybeans to China and unknown buyers.

“Soybeans are again seeing weakness from the USDA’s estimates of larger U.S. supplies,” Matt Ammermann, StoneX commodity risk manager, told Reuters this morning. “There have been regular U.S. export sales to China but of fairly modest sizes and a lot more U.S. sales are needed to support the market.”

Wheat

Rapid European Union wheat shipments are not yet concerning global wheat buyers even as marketing year to date EU export volumes soar 39% higher than the same time a year ago. That increases the likelihood of more U.S. shipments this year, raising Kansas City futures $0.01/bushel overnight.

But a stronger dollar weighed Chicago and Minneapolis prices $0.01-$0.02/bushel lower to kick off this week’s trading session even amidst the backdrop of tight supplies and export optimism.

“EU wheat exports have been surging in recent weeks and higher European prices will be needed to brake the flow to retain European domestic supplies," Ammermann continued. "With Russia restricting wheat exports, this could create prospects for new U.S. sales, with the question raised about whether Chinese wheat demand could be switched from France to the U.S.”

Weather

After last week’s rains, warm temperatures and clear skies should help farmers return to the fields for harvest activities, according to NOAA’s short-range forecasts.

A winter storm system developing today along the West Coast will likely push rain – and possibly a chance of snow – into the Northern Plains early Wednesday morning. The Upper Midwest will likely see scattered showers as a result of the system’s movement by Wednesday afternoon.

Financials

Stock markets traded lower this morning on concerns about growing Chinese regulations, surging energy prices, and inflation are more likely to shorten the Federal Reserve’s timeline for monetary policy easing.

China’s economy grew 4.9% during the third quarter after posting a 7.9% gain in the second quarter of 2021. Supply chain issues, port backlogs, an energy crunch, and housing debt crisis continue to cause economic pain for the world’s second largest economy as more of the world emerges from the pandemic.

Here is a great read on the five market forces likely to be at play this week in the financial markets. S&P 500 futures traded 33.11 points (0.75%) higher at last glance to $4,471.37.

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

Morning Ag Commodity Prices - 10/18/2021
Contract Units High Low Last Net Change % Change
NOV '21 SOYBEANS $ / BSH  12.2175 12.1275 12.13 -0.0475 -0.39%
JAN '22 SOYBEANS $ / BSH  12.3025 12.215 12.2175 -0.045 -0.37%
MAR '22 SOYBEANS $ / BSH  12.385 12.3075 12.31 -0.0425 -0.34%
MAY '22 SOYBEANS $ / BSH  12.4725 12.4025 12.405 -0.04 -0.32%
JUL '22 SOYBEANS $ / BSH  12.5375 12.4625 12.485 -0.02 -0.16%
AUG '22 SOYBEANS $ / BSH  12.4775 12.4725 12.465 0 0.10%
SEP '22 SOYBEANS $ / BSH  12.29 12.2625 12.285 0 -0.18%
NOV '22 SOYBEANS $ / BSH  12.2275 12.1825 12.1825 -0.04 -0.33%
JAN '23 SOYBEANS $ / BSH  12.2275 #N/A 12.2325 0 0.00%
DEC '21 SOYBEAN OIL  $ / LB 61.78 61.05 61.3 0.01 0.02%
JAN '22 SOYBEAN OIL  $ / LB 61.54 60.86 61.06 -0.03 -0.05%
DEC '21 SOY MEAL $ / TON 317.4 314.6 314.7 -1.9 -0.60%
JAN '22 SOY MEAL $ / TON 318.2 315.3 315.5 -1.9 -0.60%
MAR '22 SOY MEAL $ / TON 320.2 317.7 317.8 -1.8 -0.56%
MAY '22 SOY MEAL $ / TON 323.4 321.1 321.1 -1.5 -0.46%
JUL '22 SOY MEAL $ / TON 327 324.5 324.9 -1.3 -0.40%
DEC '21 Chicago SRW $ / BSH  7.3875 7.315 7.3275 -0.0125 -0.17%
MAR '22 Chicago SRW $ / BSH  7.5125 7.445 7.445 -0.02 -0.27%
MAY '22 Chicago SRW $ / BSH  7.545 7.48 7.4875 -0.015 -0.20%
JUL '22 Chicago SRW $ / BSH  7.425 7.3675 7.37 -0.0125 -0.17%
SEP '22 Chicago SRW $ / BSH  7.44 7.3775 7.39 -0.0125 -0.17%
DEC '21 Kansas City HRW $ / BSH  7.4925 7.4275 7.4425 0.005 0.07%
MAR '22 Kansas City HRW $ / BSH  7.56 7.495 7.4975 -0.01 -0.13%
MAY '22 Kansas City HRW $ / BSH  7.5875 7.54 7.5425 0.005 0.07%
JUL '22 Kansas City HRW $ / BSH  7.5 7.445 7.445 -0.0125 -0.17%
SEP '22 Kansas City HRW $ / BSH  7.5125 7.47 7.485 0.0075 0.10%
DEC '21 MLPS Spring Wheat $ / BSH  9.72 9.675 9.675 -0.0125 -0.13%
MAR '22 MLPS Spring Wheat $ / BSH  9.5975 9.5475 9.5475 -0.025 -0.26%
MAY '22 MLPS Spring Wheat $ / BSH  9.41 9.375 9.38 -0.0175 -0.19%
JUL '22 MLPS Spring Wheat $ / BSH  9.1875 9.18 9.1875 0.01 0.11%
SEP '22 MLPS Spring Wheat $ / BSH  8.3 8.26 8.2925 0.015 0.18%
DEC '21 ICE Dollar Index $ 94.175 93.91 94.045 0.107 0.11%
 NO '21 Light Crude $ / BBL  83.87 82.55 83.5 1.22 1.48%
 DE '21 Light Crude $ / BBL  83.18 81.91 82.85 1.12 1.37%
NOV '21 ULS Diesel $ /U GAL 2.608 2.5671 2.5968 0.0231 0.90%
DEC '21 ULS Diesel $ /U GAL 2.5983 2.5598 2.585 0.0209 0.82%
NOV '21 Gasoline $ /U GAL 2.5135 2.4761 2.5068 0.0204 0.82%
DEC '21 Gasoline $ /U GAL 2.45 2.417 2.4434 0.0183 0.75%
OCT '21 Feeder Cattle $ / CWT 0 #N/A 157.575 0 0.00%
NOV '21 Feeder Cattle $ / CWT 0 #N/A 161.425 0 0.00%
 OC '21 Live Cattle $ / CWT 0 #N/A 125.975 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 130.975 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 78.275 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 81.325 0 0.00%
OCT '21 Class III Milk $ / CWT 17.93 #N/A 17.94 0 0.00%
NOV '21 Class III Milk $ / CWT 19.39 19.37 19.37 0.09 0.47%
DEC '21 Class III Milk $ / CWT 18.8 #N/A 18.76 0 0.00%

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