Morning Market Review for September 24, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Grains ease on higher dollar, harvest pressure. (Comments are updated by 7:30 a.m. Central Time.)

Markets edge lower despite late night gains following a cryptocurrency crackdown in China this morning

  • Corn down 1-2 cents
  • Soybeans down 1-2 cents; Soymeal up $0.30/ton; Soyoil down $0.04/lb
  • Wheat down 2-4 cents

*Prices as of 6:55am CDT.

Happy Friday! High-moisture ear corn chopping (for snaplage) at the Holland Dairy farm is wrapped up for the season, much to everyone’s relief! The crew finished throwing tires on the bunker late last night.

However – armyworms have infested our alfalfa crop. We have already taken four crops off our alfalfa fields this season so there is more concern about the crop surviving until next spring. But with warmer temperatures later in the growing year, that opens up increased chances for pests.

Some fields in the area have already been eaten down to the stems. Late season chemical applications are in full effect as growers try to get ahead of these pests. The Washington Post actually published an interesting article about the phenomenon earlier this week – I highly recommend it to producers who may be considering alfalfa in their rotations next year.

Have you started combining on your farm yet!? Have the armyworms infested your crops? 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.

Corn

Improving corn production forecasts for the U.S. and Ukraine helped trigger losses in the corn complex overnight. Improving yield reports as harvest progresses across the Heartland also points to higher-than-expected yields for the 2021 U.S. corn crop, which could ease supply pressures and ultimately lower prices. The corn complex traded $0.01-0.02/bushel lower this morning on the prospects.

USDA releases update Cattle on Feed data today, which will provide an updated look at USDA’s perspectives on feed and residual usage rates for corn to cap off the 2020/21 marketing year. Cattle inventories typically decline between June and September during peak barbequing season.

So it really should not shock the markets today if USDA’s Cattle on Feed inventory volume comes in at the lowest point of the calendar year. Trade estimates peg today’s reading at 11.15 million head, with a projected range of 11.05 million – 11.28 million head.

Last year September inventories rebounded from August lows. Producers have been on a liquidation tear this summer as drought grips the Northern Plains. If August 2021 marketings continue to rise in today’s report, the cattle market could tighten by next late this winter.

And the trade seems to think that the likelihood of high August sales for slaughter will be high. Sales for slaughter in August are typically lower than May through June sales. But preparation for Labor Day celebrations is likely to boost August marketings over July volumes. Trade estimates place August marketings between 1.88 million – 1.92 million head, with an average guess of 1.89 million head.

Placements typically climb between July and October and today’s figure is likely to be no exception. The average trade guess for August 2021 cattle placements stands at 2.04 million head, with the trade expecting a range of 1.93 million – 2.12 million head in today’s report from USDA.

Corn planting is off to the races in Argentina after seasonal rains helped to replenish depleted soil moisture levels left in the wake of the past year’s La Niña weather cycle. The Buenos Aires Grains Exchange projects that 8.5% of anticipated 2021 Argentine corn acres were in the ground as of yesterday.

The Buenos Aires Grains Exchange expects Argentine farmers will produce 2.17 billion bushels of corn in the 2021/22 campaign, while USDA’s estimates hold steady at 2.09 billion bushels.

But concern still abounds about potential dryness. After suffering a drought over the past year, Argentine farmers are acutely aware of dry weather potential, especially with another La Niña system forecasted in the Pacific Ocean this fall. Argentina is the world’s third largest corn exporter.

Soybeans

Soybean prices also wavered between $0.01-$0.02/bushel worth of losses this morning amid concerns about China’s economic growth and harvest pressures in the U.S.

"U.S. futures and spot prices made larger gains again," Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, told Reuters overnight. "To some extent, we see that as a 'marker' that flags greater investor participation in the rises."

Grain prices remain below summer highs, but Total Farm Marketing’s Naomi Blohm does not think farmers should throw in the towel just yet. “The market needs fresh news to make a move - either fall lower from key support levels, or rally higher through overhead technical resistance on charts,” Blohm points out in the latest Ag Marketing IQ column.

Blohm outlines five factor that could influence grain prices in the coming week, citing macroeconomic factors as a key source of price movement. Federal Reserve monetary easing policies, a rallying dollar, and the Chinese economy will all have as significant of an impact on grain prices as yield estimates and updated usage rates, due to be updated next Thursday.

Wheat

Wheat prices traded in the green late last night, but the Chinese crypto crackdown and looming global economic uncertainty lifted the dollar overnight, leading the wheat complex to losses as the sun comes up.

Weakness in the corn market also hovered over the wheat complex, which traded $0.01-$0.04/bushel lower at last glance. Losses were largely offset by ongoing global supply concerns in the world’s top wheat exporting countries.

Weather

Mostly clear skies are forecast across the Heartland today, according to NOAA’s short-range forecasts. A spotty chance of showers is possible in the Northern Plains this afternoon, shifting into the Lake Michigan basin by evening, and into the Eastern Corn Belt by tomorrow.

However, total accumulation will likely be light – not topping more than a half inch in most areas – which comes as a big relief to growers in the Eastern Corn Belt who endured a soggy week.

Keep an eye on overnight thermometer readings over the weekend. As the fall season settles in, chances for frost east of the Mississippi River will increase this weekend.

Financials

Coronavirus cases in the U.S. rose to 42,674,082 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 684,360 deaths as of press time as the pandemic continues to deal devastating blows to individuals unvaccinated against the virus.

According to the CDC, nearly 77% of U.S. adults have received at least one COVID-19 vaccine as workplace mandates help boost immunity rates. Over 182 million Americans (55%) are fully vaccinated. Over 6.0 billion vaccine doses have been administered worldwide.

Someone at Husker Harvest Days last week asked me about the future of cryptocurrency. About two hours ago, the Chinese government ruled all cryptocurrency-related transactions as illegal, sending bitcoin prices plummeting – down 4.5% since China released the news. So to update my response from last week…I’m a little more bearish than usual on crypto this morning.

China’s cryptocurrency crackdown weighed U.S. stock prices lower this morning. The Federal Reserve will refresh its economic outlook later today, likely reiterating its decisions to slowly scale back monetary easing policies implemented to combat the pandemic. The dollar continued higher on mounting global economic uncertainty due to the Evergrande Group credit crisis. S&P 500 futures shed 0.42% to $4,419.50.

 

Morning Ag Commodity Prices - 9/24/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.2875 5.25 5.27 -0.0225 -0.43%
MAR '22 CORN $ / BSH  5.3625 5.33 5.35 -0.02 -0.37%
MAY '22 CORN $ / BSH  5.405 5.375 5.395 -0.0175 -0.32%
JUL '22 CORN $ / BSH  5.4 5.365 5.385 -0.0175 -0.32%
SEP '22 CORN $ / BSH  5.105 5.08 5.09 -0.015 -0.29%
DEC '22 CORN $ / BSH  5.0475 5.0325 5.0425 -0.0125 -0.25%
MAR '23 CORN $ / BSH  5.1125 5.1075 5.1125 -0.0125 -0.24%
NOV '21 SOYBEANS $ / BSH  12.9 12.795 12.8275 -0.015 -0.12%
JAN '22 SOYBEANS $ / BSH  12.9975 12.8975 12.92 -0.02 -0.15%
MAR '22 SOYBEANS $ / BSH  13.025 12.9275 12.955 -0.02 -0.15%
MAY '22 SOYBEANS $ / BSH  13.07 12.99 13.0125 -0.02 -0.15%
JUL '22 SOYBEANS $ / BSH  13.09 13.025 13.04 -0.0175 -0.13%
AUG '22 SOYBEANS $ / BSH  12.9425 12.9425 12.9425 -0.02 -0.15%
SEP '22 SOYBEANS $ / BSH  12.7125 #N/A 12.69 0 0.00%
NOV '22 SOYBEANS $ / BSH  12.5675 12.51 12.5325 -0.0125 -0.10%
JAN '23 SOYBEANS $ / BSH  12.5575 #N/A 12.5475 0 0.00%
OCT '21 SOYBEAN OIL  $ / LB 57.47 56.73 57.05 -0.05 -0.09%
DEC '21 SOYBEAN OIL  $ / LB 57.35 56.64 56.96 -0.06 -0.11%
OCT '21 SOY MEAL $ / TON 337.5 336 337 0.4 0.12%
DEC '21 SOY MEAL $ / TON 341.1 339.3 340.3 0.2 0.06%
JAN '22 SOY MEAL $ / TON 343.7 342 342.8 0 0.00%
MAR '22 SOY MEAL $ / TON 346.3 344.8 345.6 -0.2 -0.06%
MAY '22 SOY MEAL $ / TON 349.7 348.3 348.9 -0.2 -0.06%
DEC '21 Chicago SRW $ / BSH  7.1975 7.115 7.1625 -0.015 -0.21%
MAR '22 Chicago SRW $ / BSH  7.3025 7.2275 7.2775 -0.0075 -0.10%
MAY '22 Chicago SRW $ / BSH  7.3375 7.265 7.315 -0.005 -0.07%
JUL '22 Chicago SRW $ / BSH  7.145 7.1 7.12 -0.0125 -0.18%
SEP '22 Chicago SRW $ / BSH  7.15 7.115 7.14 -0.0075 -0.10%
DEC '21 Kansas City HRW $ / BSH  7.2275 7.1325 7.1675 -0.0325 -0.45%
MAR '22 Kansas City HRW $ / BSH  7.31 7.22 7.265 -0.02 -0.27%
MAY '22 Kansas City HRW $ / BSH  7.3475 7.2675 7.3 -0.0325 -0.44%
JUL '22 Kansas City HRW $ / BSH  7.21 7.165 7.18 -0.0325 -0.45%
SEP '22 Kansas City HRW $ / BSH  7.23 7.2 7.2225 -0.0125 -0.17%
DEC '21 MLPS Spring Wheat $ / BSH  9.125 9.0675 9.0925 -0.0225 -0.25%
MAR '22 MLPS Spring Wheat $ / BSH  8.985 8.94 8.96 -0.0225 -0.25%
MAY '22 MLPS Spring Wheat $ / BSH  8.835 8.835 8.835 -0.02 -0.23%
JUL '22 MLPS Spring Wheat $ / BSH  8.6975 #N/A 8.7075 0 0.00%
SEP '22 MLPS Spring Wheat $ / BSH  7.89 7.885 7.89 -0.0175 -0.22%
DEC '21 ICE Dollar Index $ 93.32 93.045 93.32 0.29 0.31%
 NO '21 Light Crude $ / BBL  73.66 72.97 73.2 -0.1 -0.14%
 DE '21 Light Crude $ / BBL  73.3 72.61 72.88 -0.07 -0.10%
OCT '21 ULS Diesel $ /U GAL 2.2565 2.2366 2.2416 -0.0075 -0.33%
NOV '21 ULS Diesel $ /U GAL 2.2554 2.2343 2.2396 -0.0068 -0.30%
OCT '21 Gasoline $ /U GAL 2.1812 2.1561 2.1621 -0.0094 -0.43%
NOV '21 Gasoline $ /U GAL 2.1356 2.1104 2.115 -0.0111 -0.52%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 154.9 0 0.00%
OCT '21 Feeder Cattle $ / CWT 0 #N/A 156.85 0 0.00%
 OC '21 Live Cattle $ / CWT 0 #N/A 123.225 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 128.625 0 0.00%
OCT '21 Live Hogs $ / CWT 0 #N/A 84.75 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 76.5 0 0.00%
SEP '21 Class III Milk $ / CWT 16.53 #N/A 16.54 0 0.00%
OCT '21 Class III Milk $ / CWT 17.22 #N/A 17.27 0 0.00%
NOV '21 Class III Milk $ / CWT 16.85 #N/A 16.96 0 0.00%

 

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