Morning Market Review for October 25, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Wheat rally continues. (Comments are updated by 7:30 a.m. Central Time.)

Tight supplies, high demand, planting concerns fuel rally for Minneapolis, Kansas City futures

  • Corn up 1-2 cents
  • Soybeans up 6-9 cents; Soymeal up $3.10/ton; Soyoil up $0.56/lb
  • Chicago wheat up 8-9 cents; Kansas City wheat up 5-7 cents; Minneapolis wheat up 7-9 cents

*Prices as of 6:50am 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

Despite scattered showers across the Heartland over the past week, there was less measurable precipitation accumulated than during the previous week, which could help pull harvest rates away from the five-year average.

Last week’s report saw 52% and 60% of U.S. corn and soybeans, respectively, harvested as of October 14. Both figures remained higher than the five-year average though the gap between the two metrics narrowed slightly week over week.

Winter wheat sowing stood at 70% complete, falling 1% behind the five-year average. As of last Sunday, 44% of the newly planted winter wheat crop had emerged, up 13% from a week prior thanks to an uptick in rainfall during the reporting period.

Corn

Chicago corn futures prices edged $0.01-$0.02/bushel higher over the weekend, lifted by another rally in the wheat complex and rain delays in the U.S. and China over the past week.

Cattle volumes recorded as of October 1 came in under trade estimates, suggesting this summer’s cattle liquidation may have been larger than previously realized – an issue that could dampen feed usage targets during the 2021/22 marketing year.

Friday’s monthly Cattle on Feed report from USDA saw a seasonal uptick in cattle volumes over the past month, with 11.55 million head of cattle on feed as of October 1. The expected trade range for the metric was pegged between 11.553 million – 11.72 million head.

In fact, all anticipated metrics released in Friday’s dataset came in lower than market expectations. Historically, cattle placements typically rise in September and while this year was no exception, at 2.16 million head, placements did not rise as rapidly as in previous years.

Cattle sales for slaughter in September are historically lower relative to peak summer months. September 2021 sales for slaughter totaled 1.79 million head, just shy of the lowest trade estimate made prior to the report’s release.

In the last couple months of the year, we can expect cattle volumes to continue rebuilding in preparation for peak demand rates in early 2022. But what corn growers should be watching is the pace of that process. If monthly volumes continue to come in lower than anticipated estimates, 2021/22 U.S. feed and residual forecasts may be cut to accommodate lower consumption rates – which could be a bearish signal for row crop farmers.

Soybeans

Soybean futures prices in Chicago traded $0.06-$0.09/bushel higher this morning as tight global edible oil supplies continue to prop up gains for the oilseed. Rains in Malaysia delayed harvest of palm oil, pushing prices for competing edible oils higher.

Harvest delays in the U.S. also supported prices this morning. Beneficial rains fell in South America over the weekend, capping the morning’s price gains as hopes for a bumper Brazilian crop were renewed.

Wheat

Wheat prices continued their rally over the weekend with Minneapolis futures soaring past the $10/bushel benchmark to a nine-year high on high international spring wheat demand following massive crop shortfalls in the Northern Hemisphere this summer, both of which are drastically tightening supplies.

The tightening supply in the wheat market pushed Kansas City futures to a seven-year high as traders grow increasingly concerned about dry weather and rising fertilizer prices across the U.S. Plains.

"Continued dry weather in Hard Red Winter wheat regions of the U.S. is helping the mood (...) as are the high level of fertiliser prices," Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, told Reuters this morning.

China held its first auction of state-reserved wheat overnight, a signal that tight domestic stocks and high grain prices may be encouraging the Chinese government to help alleviate price pressures for domestic livestock producers.

In the overnight auction, China sold 32.8 million bushels of wheat, or 88.5% of the available bushels at the auction. At $10.10/bushel, the auctioned wheat was reported by the government to have been sold at price levels below those of Chinese cash offerings.

The news suggests that recent excessive rains in China’s northern corn-growing regions may have damaged corn yields and quality more than previously believed. Lower corn prices this fall following peak harvest activity in China helped to reduce corn prices for livestock feeders who have largely moved away from more expensive soybeans in an effort to reduce costs.

Corn and wheat have been popular feed alternatives in the era of high soybean prices and shrinking profit margins for Chinese hog producers. Auctions of state wheat reserves were prominent over the last marketing year as government officials attempted to offset high commodity prices and rising food prices.

Weather

Farmers will likely spend the week dodging rain showers again, according to NOAA’s short-range forecasts. Showers in the Eastern Corn Belt today could top over an inch of accumulation in parts of Michigan and Pennsylvania but should be lighter across the rest of the region.

While tomorrow will start with clear skies, showers will move into the Plains from the Rockies tomorrow afternoon with significant storm activity likely in the Southern Plains tomorrow evening. The system will continue to move east into the Upper Midwest and Mississippi River Valley on Wednesday.

Financials

Tech earnings are top of mind for financial markets this morning. Wall Street indices were mixed leading up to the release of Facebook’s report earnings, especially after a whistleblower released evidence that the company has not been completely transparent with stakeholders about the impacts of its platforms on society.

S&P 500 futures inched up 0.10% to $4,541.00 on the sentiments.

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

Morning Ag Commodity Prices - 10/25/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.42 5.3525 5.395 0.015 0.28%
MAR '22 CORN $ / BSH  5.5025 5.4375 5.48 0.0125 0.23%
MAY '22 CORN $ / BSH  5.5375 5.475 5.5175 0.01 0.18%
JUL '22 CORN $ / BSH  5.5375 5.475 5.52 0.01 0.18%
SEP '22 CORN $ / BSH  5.3625 5.3175 5.3525 0.005 0.09%
DEC '22 CORN $ / BSH  5.345 5.295 5.325 -0.005 -0.09%
MAR '23 CORN $ / BSH  5.4075 5.3675 5.3975 0.0025 0.05%
NOV '21 SOYBEANS $ / BSH  12.3525 12.16 12.2825 0.0775 0.63%
JAN '22 SOYBEANS $ / BSH  12.455 12.265 12.3925 0.085 0.69%
MAR '22 SOYBEANS $ / BSH  12.55 12.355 12.4825 0.085 0.69%
MAY '22 SOYBEANS $ / BSH  12.64 12.4475 12.5725 0.0825 0.66%
JUL '22 SOYBEANS $ / BSH  12.685 12.5 12.6225 0.0775 0.62%
AUG '22 SOYBEANS $ / BSH  12.6225 12.575 12.575 0.0725 0.58%
SEP '22 SOYBEANS $ / BSH  12.42 12.3775 12.385 0.07 0.57%
NOV '22 SOYBEANS $ / BSH  12.35 12.185 12.2925 0.055 0.45%
JAN '23 SOYBEANS $ / BSH  12.355 #N/A 12.2475 0 0.00%
DEC '21 SOYBEAN OIL  $ / LB 62.93 62.01 62.55 0.46 0.74%
JAN '22 SOYBEAN OIL  $ / LB 62.45 61.59 62.06 0.44 0.71%
DEC '21 SOY MEAL $ / TON 331.3 325.1 330.5 3.1 0.95%
JAN '22 SOY MEAL $ / TON 329.2 323.4 328.3 2.9 0.89%
MAR '22 SOY MEAL $ / TON 329 323.4 327.9 2.5 0.77%
MAY '22 SOY MEAL $ / TON 331.3 326.1 330 2.2 0.67%
JUL '22 SOY MEAL $ / TON 335.2 329.7 334.2 2.7 0.81%
DEC '21 Chicago SRW $ / BSH  7.67 7.5325 7.6425 0.0825 1.09%
MAR '22 Chicago SRW $ / BSH  7.775 7.6475 7.75 0.075 0.98%
MAY '22 Chicago SRW $ / BSH  7.7875 7.6725 7.7675 0.07 0.91%
JUL '22 Chicago SRW $ / BSH  7.64 7.5375 7.6225 0.0575 0.76%
SEP '22 Chicago SRW $ / BSH  7.635 7.5425 7.625 0.0525 0.69%
DEC '21 Kansas City HRW $ / BSH  7.815 7.685 7.7975 0.0575 0.74%
MAR '22 Kansas City HRW $ / BSH  7.835 7.7125 7.8225 0.0575 0.74%
MAY '22 Kansas City HRW $ / BSH  7.8125 7.7 7.7975 0.0475 0.61%
JUL '22 Kansas City HRW $ / BSH  7.66 7.565 7.6525 0.0325 0.43%
SEP '22 Kansas City HRW $ / BSH  7.65 7.565 7.6375 0.0225 0.30%
DEC '21 MLPS Spring Wheat $ / BSH  10.2075 10.09 10.2025 0.0725 0.72%
MAR '22 MLPS Spring Wheat $ / BSH  9.97 9.85 9.97 0.085 0.86%
MAY '22 MLPS Spring Wheat $ / BSH  9.7025 9.6175 9.7025 0.075 0.78%
JUL '22 MLPS Spring Wheat $ / BSH  9.405 9.3175 9.405 0.0625 0.67%
SEP '22 MLPS Spring Wheat $ / BSH  8.3775 8.375 8.375 0.005 0.06%
DEC '21 ICE Dollar Index $ 93.835 93.465 93.83 0.205 0.22%
 DE '21 Light Crude $ / BBL  84.76 83.74 84.72 0.96 1.15%
 JA '21 Light Crude $ / BBL  83.37 82.42 83.3 0.8 0.97%
NOV '21 ULS Diesel $ /U GAL 2.5637 2.539 2.5611 0.0222 0.87%
DEC '21 ULS Diesel $ /U GAL 2.557 2.5311 2.5566 0.0254 1.00%
NOV '21 Gasoline $ /U GAL 2.5137 2.4819 2.5121 0.03 1.21%
DEC '21 Gasoline $ /U GAL 2.4486 2.4153 2.4464 0.0308 1.28%
OCT '21 Feeder Cattle $ / CWT 0 #N/A 155.425 0 0.00%
NOV '21 Feeder Cattle $ / CWT 0 #N/A 156.9 0 0.00%
 OC '21 Live Cattle $ / CWT 0 #N/A 124.1 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 128.325 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 73.325 0 0.00%
FEB '22 Live Hogs $ / CWT 0 #N/A 76.625 0 0.00%
OCT '21 Class III Milk $ / CWT 17.86 #N/A 17.87 0 0.00%
NOV '21 Class III Milk $ / CWT 19.61 19.45 19.45 -0.16 -0.82%
DEC '21 Class III Milk $ / CWT 19.43 19.27 19.28 -0.15 -0.77%

Get our top content delivered right to your inbox. Subscribe to our morning and afternoon newsletters!

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