Afternoon Market Recap for December 1, 2021

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Soybeans snap five-session losing streak.

Corn and most wheat prices also trend higher Wednesday

Grain prices finally showed some recovery after facing heavy losses earlier this week, although concerns over how the omicron variant could affect the global economy are still lurking in the background. Traders are also generally expecting a healthy round of export sales data from USDA tomorrow morning. Corn futures firmed 0.6%, with soybeans trending nearly 1% higher. Wheat futures were mixed but mostly higher. Kansas City HRW contracts were the lone holdout, sliding another 0.5% lower today.

Some light rain and snow is still possible for parts of the Northern Plains and upper Midwest between Thursday and Sunday, although very few areas can expect to see much more than 0.25” during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a continuation of warmer-than-normal conditions for most of the U.S. between December 8 and December 14, with seasonally dry weather hovering in the Central Plains. Some wetter-than-normal conditions are possible for the eastern Corn Belt, meantime.

On Wall St., the Dow was up 500 points this morning but only trended 53 points in afternoon trading, to 34,537, with the first omicron case now reported in the United States (an inevitability, to be honest). Markets remain sensitive to whether this new variant will create any sort of slowdown to the global economy. Energy prices were mixed.

Crude oil slid 0.75% lower this afternoon to move back below $66 per barrel for the first time since August. Diesel firmed 0.75%, in contrast, with gasoline up around 0.4%. Volatile natural gas plummeted 6.5% lower. The U.S. Dollar firmed fractionally.

On Tuesday, commodity funds were net sellers of corn (-30,000), soybeans (-20,000), soyoil (-15,000) and CBOT wheat (-22,500) contracts and were roughly even trading soymeal contracts.

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Corn

Corn prices made some moderate inroads after some technical buying today, closing with gains of around 0.6% after a somewhat choppy session. December and March futures each picked up 3.5 cents to reach $5.7050 and $5.71, respectively.

Corn basis bids were mostly steady to firm on Wednesday after rising 3 to 5 cents higher at four Midwestern locations. An Illinois river terminal bucked the overall trend, slipping 2 cents lower today.

Private exporters announced to USDA the sale of 5.9 million bushels of corn for delivery to Colombia during the 2021/22 marketing year, which began September 1.

Ethanol production for the week ending November 26 slid moderately lower, to a daily average of 1.035 million barrels, per the latest data from the U.S. Energy Information Association. Production has essentially returned to pre-pandemic levels, staying above the 1-million-barrel daily benchmark for eight consecutive weeks. Stocks tilted a bit higher, reaching 20.301 million barrels.

Ahead of the next USDA export report, out Thursday morning, analysts expect the agency to show corn sales ranging between 23.6 million and 52.3 million bushels for the week ending November 25.

Ukraine’s agriculture ministry reports that the country’s corn exports totaled 216.5 million bushels in November. Ukraine is coming off a record-breaking grain harvest this year and is one of the world’s top exporters of both corn and wheat.

Brazil exported 94.6 million bushels of corn in November, but that was only roughly half of the total sold the same time a year ago, per newly available governmental data.

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Preliminary volume estimates were for 208,704 contracts, taking a significant step below Tuesday’s final count of 398,992.

Soybeans

Soybean prices attracted some bargain buying after slumping lower for the past five sessions, closing nearly 1% higher on Wednesday. January futures rose 11 cents to $12.2825, with March futures up 8.75 cents to $12.3525.

Soybean basis bids tilted 4 cents higher at an Ohio elevator and 6 cents higher at an Illinois river terminal while holding steady elsewhere across the central U.S. today.

Ahead of tomorrow morning’s export report from USDA, analysts think the agency will show soybean sales ranging between 29.4 million and 69.8 million bushels for the week ending November 25. Analysts also expect to see soymeal sales ranging between 100,000 and 210,000 metric tons, plus another 30,000 MT to 70,000 MT in soyoil sales.

Brazil’s soybean exports in November totaled 95.2 million bushels, versus year-over-year results of 52.9 million bushels. However, most Brazilian commodity exports were down year-over-year, including corn, beef, poultry, sugar and crude oil.

Preliminary volume estimates were for 171,016 contracts, facing a moderate drop from Tuesday’s final count of 223,811.

Wheat

Wheat prices were mixed but mostly higher after an uneven round of technical maneuvering, thanks in part to spillover strength from corn and soybeans. December Chicago SRW futures added 4.75 cents to $7.7850, December Kansas City HRW futures dropped 4.25 cents to $8.1475, and December MGEX spring wheat futures rose 13 cents to $10.33.

Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show wheat sales ranging between 9.2 million and 23.9 million bushels for the week ending November 25.

Approximately 82% of the High Plains were experiencing some level of drought through November 23. That’s high, but not quite as bad as year-over-year levels of 96%. The U.S. Drought Monitor releases its next set of data tomorrow morning.

Ukraine exported a total of 79.7 million bushels of wheat in November, bringing the country’s total wheat sales for the 2021/22 marketing year to 533.6 million bushels, according to the latest data from its agriculture ministry.

Japan issued two regular tenders to purchase 1.9 million bushels of food-quality wheat from the United States, which close on Thursday and Friday. The grain is for shipment in March.

Preliminary volume estimates were for 75,627 CBOT contracts, sliding moderately below Tuesday’s final count of 134,475.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn              cents/bu    
21-Dec 576 567 572 3.5
22-Mar 576.25 567.25 571.5 3.5
Soybeans        
22-Jan 1237 1216.25 1228.25 11
22-Mar 1244 1223.5 1235 8.75
Soymeal              $/ton        
22-Jan 353 340.7 349.1 7.9
Soyoil            cents/lb        
22-Jan 56.12 55.05 55.18 -0.16
Wheat           $/bushel        
21-Dec 785.5 774.75 778.5 4.75
22-Mar 799 785.5 790.5 2
KC Wheat        
21-Dec 824.25 810.25 814.25 -4.25
22-Mar 833 811.25 819.25 -3
MPLS Wheat        
21-Dec 1033 1020 1037 13
22-Mar 1026 1001 1019.75 9.25
Live Cattle      cents/lb        
21-Dec 137.425 135.9 136.15 0.275
Feeder Cattle      cents/lb        
22-Mar 168.225 166.525 168.2 1.7
Lean Hogs       cents/lb        
22-Feb 80.65 79.25 80 0.025
Crude Oil  $/barrel *Energy prices may not represent final settlements      
22-Jan 69.49 65.43 65.69 -0.49
Diesel        
22-Jan 2.16 2.0678 2.0752 0.0149
Unleaded Gasoline $/gallon        
22-Jan 2.0369 1.9433 1.9512 0.0111
Natural Gas        
22-Feb 4.603 4.159 4.172 -0.334
Ethanol Futures        
22-Jan     2.137  
U.S. Dollar Index        
21-Dec 96.14 95.665 96.02 0.013
Gold           $/ounce        
22-Jan 1792.4 1772.5 1780.9 7.3
Copper        
21-Dec 4.345 4.2295 4.2335 -0.0445
Fertilizer Swaps     (as of 11/26)  
DAP Tampa-index              810.0 70
DAP-New Orleans              821.2 17
Urea-New Orleans              890.1 -1
Urea-Middle East              945.0 0
Urea-Black Sea              910.0 0
UAN (32%) New Orleans              617.3 0

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