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Afternoon Market Recap for April 9, 2021

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Wheat prices charge ahead.

Corn suffered a moderate setback Friday, while soybeans faced double-digit losses

Grain prices were mixed after traders digested a big set of data from USDA’s latest World Agricultural Supply and Demand Estimates (WASDE) report, out late this morning. Corn prices slipped a bit lower, even despite USDA trimming stocks significantly – that expectation was already baked into the markets earlier this week. Stubborn soybean stocks failed to move lower than 120 million bushels, which led to some technical selling that left prices about 0.8% lower today. But weather concerns in the U.S. and abroad, coupled with tightening global stockpiles, handed out another healthy dose of gains for winter and spring wheat prices.

Plenty of wet weather is still in store for much of the Midwest between Saturday and Tuesday, with some areas expecting as much as 1.5” or more during that time, per the latest 72-hour cumulative precipitation map from NOAA. But weather patterns are expected to turn up drier between April 16 and April 22, according to the agency’s latest 8-to-14-day outlook, with sharply colder weather likely for much of the Corn Belt.

On Wall St, the Dow climbed another 130 points to reach 33,633, an all-time high. Stocks benefiting from the recovering economy (cruise ships and airlines, for example) were a sure bet for big gains today. Energy prices were lightly mixed. Crude oil slid 0.4% lower to remain just below $60 per barrel, with diesel dropping about 0.2% this afternoon. Gasoline firmed slightly. The U.S. Dollar also firmed slightly today, while safe-haven gold slid nearly 1% lower.

On Thursday, commodity funds were net buyers of corn (+35,000), soybeans (+4,000), soyoil (+1,500) and CBOT wheat (+10,500) contracts but were net sellers of soymeal (-1,000).

Corn

Corn prices tested moderate gains Friday morning but ultimately eroded into the red by the close after some technical selling. Prices remain very close to multiyear highs, however. May futures dropped 3.75 cents to $5.76, with July futures easing 1.25 cents lower to $5.6075.

Corn basis bids were steady to mixed Friday, moving as much as 4 cents higher at an Iowa ethanol plant while dropping as much as 3 cents lower at an Illinois river terminal today.

Eye-popping export volumes over the past month did not go unnoticed by USDA in today’s WASDE report. U.S. corn exports were raised 75 million bushels to 2.675 billion bushels – a new record high –to reflect surging livestock demand from Southeast Asian countries, led primarily by China.

USDA also updated its production estimates this morning. Corn production is expected to reach 14.182 billion bushels, assuming average yields of 172.0 bushels per acre across 82.5 million acres. Click here for much more information and our exclusive analysis regarding today’s report.

China’s ministry of agriculture announced the country will likely need to import more than 866 million bushels of corn in the 2020/21 marketing year. That’s more than double prior forecasts just a month ago, but soaring domestic prices have heated up import demands. USDA’s estimates for China’s import needs are even more bullish, at 944.8 million bushels.

France, the top European Union corn producer, has 9% of its 2021 crop planted, up from 2% a week ago, according to its FranceAgriMer consultancy.

Russia’s top crop is indisputably wheat, but the country also produces a modest amount of corn. The country’s SovEcon consultancy estimates 2021 corn production will reach 566.9 million bushels.

Preliminary volume estimates were for 485,714 contracts, cooling slightly below Thursday’s final count of 497,997.

Soybeans                                   

Soybean prices fought through a choppy session, ultimately closing down double-digits after a round of technical selling Friday, due largely to an uptick in global stocks. Despite some day-to-day volatility, prices have stayed in a fairly narrow channel at or slightly above $14 per bushel since late February. Today, May futures dropped 12 cents to $14.0325, with July futures down 11.75 cents to $13.98.

Soybean basis bids were largely steady across the central U.S. Friday but did jump 10 cents higher at an Iowa processor today.

USDA largely left U.S. soybean stocks unchanged at 120 million bushels in today’s report, though some balance sheet adjustments were made to reflect revisions to December 1, 2020 soybean stocks and extra Chinese export demand during Brazil’s shipping delays. The agency also trimmed 10 million bushels from its 2020/21 crushing estimates, although volume is still expected to reach a record high of 2.19 billion bushels.

USDA also estimates U.S. farmers will plant 82.3 million acres of soybeans later this spring. Assuming average yields of 50.2 bpa, that would lead to a total production of 4.135 billion bushels in 2021.

Favorable crop conditions in Brazil’s Trio Grande do Sul and better than anticipated harvest data from Mato Grosso led USDA to raise its estimates on Brazil’s 2020/21 soybean crop by 74 million bushels to 4.997 billion bushels – a new record high for Brazilian soybean production and on par with some other estimates that have been recently circulating. Argentina’s soybean production estimates held steady, at 1.745 billion bushels.

Preliminary volume estimates were for 226,104 contracts, shifting 17% above Thursday’s final count of 193,876.

Wheat

Wheat prices jumped higher again on Friday after USDA reported smaller global stocks in today’s WASDE report, which triggered another round of technical buying. Spring wheat prices led the way again today and concluded a red-hot week, with nearby contracts rising 9.7% since Monday’s open. May Chicago SRW futures gained 10.25 cents to $6.39, May Kansas City HRW futures rose 10.5 cents to $5.87, and May MGEX spring wheat futures climbed 17.75 cents to $6.58.

USDA’s latest supply and demand data for wheat includes a 2021 production estimate of 1.826 billion bushels. Ending stocks for 2020/21 tilted 12 million bushels higher, to 852 million bushels. Farm Futures grain market analyst Jacquie Holland remains optimistic: “In the short run, the U.S. will likely be a primary global source for wheat, especially as Chinese demand soars and Russia’s steep wheat export tax limits international grain flows.”

Also worth noting in today’s report, Holland adds, is that a 135-million-bushel increase to global feed consumption, coupled with a 53-million-bushel increase in global food usage, sent global 2020/21 wheat stocks down 208 million bushels to 10.857 billion bushels. Supplies are likely to remain adequate through the 2021/22 shipping season despite the tightened beginning stocks estimate, she says.

Russian consultancy SovEcon now estimates the country’s 2021 wheat production potential at 2.965 billion bushels, which is 1.8% higher than its prior projection, due to better crop conditions in the country’s southern production regions. Russia is the world’s No. 1 wheat exporter.

French quality ratings are unchanged from a week ago, according to farm office FranceAgriMer, with 87% of the crop rated in good-to-excellent condition through April 5.

Preliminary volume estimates were for 233,473 CBOT contracts, trending moderately above Thursday’s final count of 180,088.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-May 595 575.5 577.25 -3.75
21-Jul 577 559.75 562.75 -1.25
Soybeans        
21-May 1419 1400.75 1403 -12
21-Jul 1413.5 1395.5 1398.25 -11.75
Soymeal                $/ton        
21-Jul 413.5 404.8 405.5 -5
Soyoil                    cents/lb        
21-Jul 51.75 50.8 50.93 -0.52
Wheat                    $/bushel        
21-May 646.5 627.25 638.75 10.25
21-Jul 646.5 628.5 640.5 9.25
KC Wheat        
21-May 592.5 576.75 586.5 10.5
21-Jul 599.5 583.75 594.25 11.25
MPLS Wheat        
21-May 658 640.25 654 17.75
21-Jul 665 647.5 661.25 17.5
Live Cattle             cents/lb        
21-Apr 124.575 123.275 123.4 -0.75
Feeder Cattle         cents/lb        
21-May 151.8 148.775 149.9 -1.7
Lean Hogs             cents/lb        
21-May 106.775 105.425 106.275 0.85
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-May 59.95 59.1 59.38 -0.22
Diesel        
21-Apr 1.8128 1.7882 1.8089 -0.0009
Unleaded Gasoline   $/gallon        
21-Apr 1.9691 1.94 1.967 0.0077
Natural Gas        
21-Jun 2.63 2.588 2.611 0.004
Ethanol Futures        
21-Jun     1.905  
U.S. Dollar Index        
21-Jun 92.43 92.035 92.15 0.081
Gold                      $/ounce        
21-May 1757.1 1731 1741.2 -15.6
Copper        
21-Apr 4.0885 4.058 4.058 -0.0455
Fertilizer Swaps     (as of 04/09)  
DAP Tampa-index              585.0 0
DAP-New Orleans              603.5 8
Urea-New Orleans              427.2 5
Urea-Middle East              370.0 -20
Urea-Black Sea              332.5 -5
UAN (32%) New Orleans              323.5 -4.41

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