Morning Market Review for September 27, 2021

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Soy, wheat claw out gains on export optimism. (Comments are updated by 7:30 a.m. Central Time.)

Harvest pressure weighs on corn complex

  • Corn down 1-2 cents
  • Soybeans up 2-4 cents; Soymeal up $3.10/ton; Soyoil down $0.73/lb
  • Wheat up 1-3 cents

*Prices as of 6:50am CDT.

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Crop Progress report out today

Harvest progress will be the main focus of today’s weekly Crop Progress update from USDA. Heavy rains last week in the Eastern Corn Belt likely limited strong harvest advancement in that region and that could put a slight damper on USDA’s harvest readings for the week ending September 26.

But that could be a good thing for prices in today’s trading session. Mounting supplies from a rapid harvest have already pressured futures prices lower over the past week. A slowdown in those rates could potentially pull back some of those losses, or at least minimize them.

We are still a few months away from seeing yield estimates forecasted with any certainty from USDA. But anecdotal reports from across the Heartland point to an uptick in plant damage from tar spot, rust, and army worm reports – not surprising considering the numerous weather anomalies in this year’s growing cycle (drought, excessive rains, unseasonably late warmth).

Last week’s report saw corn harvest at 10% complete as of September 19. Soybean harvest was 6% complete during the same reporting period. Winter wheat planting for crops to be harvested in 2022 was 21% complete thanks to faster than average sowing rates in the Pacific Northwest and Northern Plains.

Corn

Harvest pressure sent corn futures $0.01-$0.02/bushel lower overnight, with the complex’s losses capped by rising energy prices.

"Corn is being weakened today by expectations of good progress in the U.S. corn harvest," Matt Ammermann, StoneX commodity risk manager, told Reuters overnight. "The extended forecasts for U.S. corn belts are for warm and generally dry weather and we should see a faster harvest this year."

Friday’s CFTC Commitment of Traders report saw managed money’s optimism for corn continue to drift below late season 2020/21 levels as harvest progresses through the Corn Belt. Friday’s report saw the funds trim 4,354 short positions to end the week as net buyers, growing their net long position to 214,350 contracts.

Harvest pressure and the prospect of larger supplies have played a big role in declining hedge fund interest in commodities. Lower than expected inflation readings a couple weeks ago also ease inflation hedging concerns in the commodity complex.

A recovery to export terminals in the Gulf could help stave off a total investor selloff in the grains complex, as long as grain flows are able to continue moving out of U.S. ports. The dollar’s rally early last week on concerns about the stability of China’s housing market dropped global commodity prices enough to ease investor interest in corn, but not enough to trigger a full selloff.

Soybeans

Soybean prices rose $0.02-$0.04/bushel overnight on optimism for Chinese demand of U.S. soybeans. It was an interesting market development, considering at least 20 soymeal processing facilities in China shut down operations last week to comply with new regulations from Beijing to scale back industrial-produced carbon emissions.

But U.S. traders remain bullish on soy demand from China in the coming weeks, especially with peak export season just around the corn and export terminals in the Gulf slowly returning to full capacity following Hurricane Ida damage sustained a month ago.

"Soybeans are being pulled between expectations of more U.S. sales to China but with concern about high energy prices disrupting Chinese soybean crushing and also positive weather for the U.S. soybean harvest," Ammermann told Reuters.

"There is belief China needs U.S. soybeans for November, December and January shipments so they would have to start buying soon," Ammermann observed. "But the news about energy problems stopping Chinese crushing plants raises question marks about China's import needs."

Wheat

Wheat prices wavered between gains and losses in the overnight trade, settling $0.01-$0.03/bushel higher at last glance. The dollar continued higher overnight, but a quiet overnight trading session prevented any larger gains – or losses – in the wheat complex.

Weather forecasts continue to support rapid planting paces for 2022 winter wheat crops. Traders remain hopeful that rising Russian wheat export taxes will shift some global wheat demand to U.S. shores, despite the prospect of smaller U.S. exportable wheat supplies in 2021/22 compared to a year prior.

Weather

Mostly clear skies are forecast across the Heartland today and tomorrow, according to NOAA’s short-range forecasts. That should allow for harvest to continue advancing across the Corn Belt over the next couple days.

A storm system building in the Pacific Northwest today will shift east across the Plains by early Wednesday morning. As the low-pressure system carrying the front continues to move east, harvest progress in the Midwest could slow on rain delays by the end of this week.

Financials

Coronavirus cases in the U.S. rose to 42,932,211 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 688,041 deaths as of press time as the pandemic continues to deal devastating blows to individuals unvaccinated against the virus.

According to the CDC, 77% of U.S. adults have received at least one COVID-19 vaccine as workplace mandates help boost immunity rates. Nearly 184 million Americans (55%) are fully vaccinated. Over 6.1 billion vaccine doses have been administered worldwide.

U.S. stock market futures varied this morning as investors traded mixed sentiments on fallout from tightening global energy stocks and China’s real estate debt crisis. Traders are concerned about faltering manufacturing data expected out of China this week. West Texas Intermediate crude futures contracts inched over $75/barrel this morning as markets evaluate shrinking global energy supplies. S&P 500 futures traded 0.07% lower to $4,442.75 while Dow futures rose 0.21% to $34,748.

Morning Ag Commodity Prices - 9/27/2021
Contract Units High Low Last Net Change % Change
DEC '21 CORN $ / BSH  5.2625 5.24 5.2475 -0.02 -0.38%
MAR '22 CORN $ / BSH  5.3375 5.315 5.3225 -0.0225 -0.42%
MAY '22 CORN $ / BSH  5.38 5.36 5.3675 -0.0225 -0.42%
JUL '22 CORN $ / BSH  5.3775 5.355 5.36 -0.0225 -0.42%
SEP '22 CORN $ / BSH  5.1125 5.0975 5.11 -0.0075 -0.15%
DEC '22 CORN $ / BSH  5.05 5.0275 5.045 -0.0025 -0.05%
MAR '23 CORN $ / BSH  5.115 5.115 5.115 -0.0025 -0.05%
NOV '21 SOYBEANS $ / BSH  12.925 12.82 12.86 0.01 0.08%
JAN '22 SOYBEANS $ / BSH  13.0225 12.9175 12.955 0.0075 0.06%
MAR '22 SOYBEANS $ / BSH  13.055 12.9525 12.995 0.0175 0.13%
MAY '22 SOYBEANS $ / BSH  13.105 13.015 13.0475 0.015 0.12%
JUL '22 SOYBEANS $ / BSH  13.1225 13.0325 13.07 0.0175 0.13%
AUG '22 SOYBEANS $ / BSH  13.01 #N/A 12.9625 0 0.00%
SEP '22 SOYBEANS $ / BSH  12.7125 12.7 12.7 0.0025 0.02%
NOV '22 SOYBEANS $ / BSH  12.6025 12.5175 12.565 0.0225 0.18%
JAN '23 SOYBEANS $ / BSH  12.5975 #N/A 12.545 0 0.00%
OCT '21 SOYBEAN OIL  $ / LB 58 57.17 57.26 -0.71 -1.22%
DEC '21 SOYBEAN OIL  $ / LB 57.9 57.05 57.11 -0.76 -1.31%
OCT '21 SOY MEAL $ / TON 339 335.8 338.9 2.8 0.83%
DEC '21 SOY MEAL $ / TON 341.9 338 341.7 2.7 0.80%
JAN '22 SOY MEAL $ / TON 344 340.8 343.8 2.5 0.73%
MAR '22 SOY MEAL $ / TON 346.7 343.7 346.6 2.4 0.70%
MAY '22 SOY MEAL $ / TON 349.9 347.1 349.8 2.5 0.72%
DEC '21 Chicago SRW $ / BSH  7.285 7.2175 7.2375 0 0.00%
MAR '22 Chicago SRW $ / BSH  7.395 7.33 7.3475 0 0.00%
MAY '22 Chicago SRW $ / BSH  7.425 7.3625 7.38 0 0.00%
JUL '22 Chicago SRW $ / BSH  7.1975 7.145 7.15 -0.01 -0.14%
SEP '22 Chicago SRW $ / BSH  7.2025 7.155 7.155 -0.01 -0.14%
DEC '21 Kansas City HRW $ / BSH  7.245 7.175 7.2 0.0025 0.03%
MAR '22 Kansas City HRW $ / BSH  7.32 7.2575 7.2775 0 0.00%
MAY '22 Kansas City HRW $ / BSH  7.365 7.3075 7.325 0.005 0.07%
JUL '22 Kansas City HRW $ / BSH  7.225 7.18 7.18 -0.015 -0.21%
SEP '22 Kansas City HRW $ / BSH  7.245 7.245 7.245 0.0325 0.45%
DEC '21 MLPS Spring Wheat $ / BSH  9.2075 9.1525 9.1775 0.0175 0.19%
MAR '22 MLPS Spring Wheat $ / BSH  9.075 9.025 9.045 0.0175 0.19%
MAY '22 MLPS Spring Wheat $ / BSH  8.9225 8.9225 8.9225 0.025 0.28%
JUL '22 MLPS Spring Wheat $ / BSH  8.765 #N/A 8.7325 0 0.00%
SEP '22 MLPS Spring Wheat $ / BSH  7.92 7.92 7.92 0.0175 0.22%
DEC '21 ICE Dollar Index $ 93.495 93.195 93.44 0.105 0.11%
 NO '21 Light Crude $ / BBL  75.33 74.16 75 1.02 1.38%
 DE '21 Light Crude $ / BBL  74.92 73.79 74.64 1.03 1.40%
OCT '21 ULS Diesel $ /U GAL 2.3022 2.2689 2.2989 0.0318 1.40%
NOV '21 ULS Diesel $ /U GAL 2.2999 2.265 2.2963 0.0317 1.40%
OCT '21 Gasoline $ /U GAL 2.21 2.1837 2.2034 0.0159 0.73%
NOV '21 Gasoline $ /U GAL 2.1621 2.1347 2.1521 0.0144 0.67%
SEP '21 Feeder Cattle $ / CWT 0 #N/A 154.625 0 0.00%
OCT '21 Feeder Cattle $ / CWT 0 #N/A 157.35 0 0.00%
 OC '21 Live Cattle $ / CWT 0 #N/A 122.925 0 0.00%
 DE '21 Live Cattle $ / CWT 0 #N/A 128.15 0 0.00%
OCT '21 Live Hogs $ / CWT 0 #N/A 87.275 0 0.00%
DEC '21 Live Hogs $ / CWT 0 #N/A 76.8 0 0.00%
SEP '21 Class III Milk $ / CWT 0 #N/A 16.53 0 0.00%
OCT '21 Class III Milk $ / CWT 17.38 17.32 17.32 0.02 0.12%
NOV '21 Class III Milk $ / CWT 17.12 17 17.12 0.16 0.94%

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