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Afternoon Market Recap for Jan. 15, 2021

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Profit-takers slice corn, soybean prices.

Wheat prices finish Friday’s session mostly firm

All told, it was a great week for grain prices – you just had to look past Friday’s results, which pushed corn and soybean futures down moderately on a round of profit-taking and technical selling. But for the week, nearby corn contracts climbed 6.9% higher after USDA reported much lower-than-expected yields and production, along with moderately tighter stocks. Soybeans didn’t quite match that performance, but nearby contracts still finished the week 2.4% higher than Monday’s open. Wheat prices saw moderate gains Friday on the latest news out of Russia (more on that below).

Some additional rain and snow is expected to make its way across the Midwest and Plains between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. No areas are expected to pick up much more than 0.25” during that time, however. NOAA’s 8-to-14-day outlook predicts seasonally cool, wet weather for much of the central U.S. between January 22 and January 28, possibly spelling some drought relief for some of the country. Through January 12, 61.8% of the U.S. was experiencing some level of drought.

On Wall St., the Dow slid 84 points lower in afternoon trading to 30,907 on poor-performing financial and industrial stock performances. The Dow is on pace to lose 0.6% this week. Energy futures saw more severe cuts, with crude oil down more than 2.25% this afternoon to fall back below $53 per barrel on demand worries amid the ongoing global coronavirus pandemic. Gasoline and diesel each dropped 1.8%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were significant buyers of all major grain contracts, including corn (+30,000), soybeans (+18,000), soymeal (+6,500), soyoil (+6,500) and CBOT wheat (+8,500).

NOTE: Grain markets will be closed Monday, January 18, in observance of the Martin Luther King, Jr. holiday. Please visit www.FarmFutures.com first thing Tuesday for our next round of market news and analysis. Also note that because of the holiday, USDA reports on grain export inspections and export sales will be delayed by one day next week.

Corn

Corn prices tilted more than 0.5% lower Friday after a round of profit-taking and technical selling. Traders mostly shrugged off a large sale to Mexico this morning. Spillover weakness from soybeans created additional headwinds today. It was still a very positive week for prices, as nearby prices climbed nearly 7% above Monday’s open. But today, March futures faded 3.5 cents lower to $5.30, with May futures down 4 cents to $5.3375.

Corn basis bids were steady across most Midwestern locations Friday but did trend 2 cents higher at an Iowa river terminal and 2 cents lower at an Ohio elevator today.

Private exporters announced to USDA the sale of 4.3 million bushels of corn for delivery to Mexico during the 2020/21 marketing year, which began September 1.

The Environmental Protection Agency will be seeking comments on a proposed waiver for 2019 and 2020 that would exempt oil refiners from their biofuel blending obligations. A second proposed rule would remove or change labeling for E15 gasoline. Both notices should be published in the Federal Register next Tuesday.

Ukraine has exported 405.5 million bushels of corn so far during the 2020/21 marketing year. Total grain exports are down 18% after the country failed to match its record-breaking 2019 harvest.

Preliminary volume estimates were for 350,576 contracts, moderately trailing Thursday’s final count of 406,881.

Soybeans

Soybean prices followed corn prices lower on a round of technical selling and profit-taking, finishing the session down more than 1% after facing double-digit losses. Soymeal and soyoil prices also landed in the red today. For soybeans, March futures lost 15.75 cents to $14.1475, with May futures down 15.25 cents to $14.1250.

Soybean basis bids slipped a penny lower at an Ohio elevator and dropped 5 cents at an Indiana processor while firming 7 cents higher at an Illinois river terminal, while holding steady elsewhere across the central U.S. today.

Private exporters announced to USDA the sale of 11.7 million bushels of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which begins September 1.

The National Oilseed Processors Association (NOPA) reported a December soybean crush of 183.159 million bushels, the all-time highest for December and the second-highest monthly tally ever (trailing only October 2020). Last month’s crush came very close to analyst estimates, which offered an average trade guess of 183.175 million bushels.

All told, NOPA members crushed 2.082 billion bushels of soybeans last year, topping the previous annual record of 1.971 billion bushels in 2018. Meantime, soyoil stocks are at a six-month high of 1.699 billion pounds through the end of December. That was slightly below the average trade guess of 1.712 billion pounds.

A study commissioned by the U.S.-China Business Council determined that the trade war with China led to approximately 245,000 lost jobs in the United States, adding that if both countries scaled back current tariffs, it could add an additional 145,000 U.S. jobs by 2025. “With China forecast to drive around one-third of global growth over the next decade, maintaining market access to China is increasingly essential for U.S. businesses’ global success,” the study noted.

Preliminary volume estimates were for 196,282 contracts, coming in just short of Thursday’s final count of 217,585.

Wheat

Wheat prices were mostly higher Friday on a round of technical buying supported by news that Russia could impose higher export taxes through the end of the 2020/21 marketing year. That helped push winter wheat prices moderately higher, but spring wheat prices finished today’s session narrowly mixed. March Chicago SRW futures added 4.75 cents to $6.7475, March Kansas City HRW futures rose 7.75 cents to $6.4425, and March MGEX spring wheat futures slipped 0.25 cents lower to $6.4025.

Russia still plans to increase its export tax on wheat starting on March 1 and continuing throughout the 2020/21 marketing year in an attempt to protect domestic food prices. That move has been supportive of higher futures prices both overseas and in the U.S., amid fresh supply concerns. Russia is the world’s No. 1 wheat exporter.

Ukraine has exported 466.6 million bushels of wheat so far during the 2020/21 marketing year, plus another 179.1 million bushels of barley. The country accounts for roughly 16% of the world’s total grain exports.

Preliminary volume estimates were for 161,196 CBOT contracts, moving moderately ahead of Thursday’s final count of 116,729.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 536.5 527.75 531.5 -3.5
21-May 539.5 531 534.75 -4
Soybeans        
21-Mar 1434.5 1413.5 1416.75 -15.75
21-May 1431.75 1410.5 1414.75 -15.25
Soymeal                $/ton        
21-May 462.1 455.7 458.5 -2.5
Soyoil                    cents/lb        
21-May 42.81 41.16 41.49 -1.09
Wheat                    $/bushel        
21-Mar 693 664.5 675.5 4.75
21-May 693 666.25 676.5 4.5
KC Wheat        
21-Mar 660 635.5 643 7.75
21-May 663 638.75 646 7
MPLS Wheat        
21-Mar 653.25 635.75 643.25 -0.25
21-May 661 643.75 651.75 0.25
Live Cattle             cents/lb        
20-Dec 113.3 111.9 112.65 0.575
Feeder Cattle         cents/lb        
21-Mar 136.425 133.375 135.7 2.325
Lean Hogs             cents/lb        
21-Apr 72.9 71.425 72.85 0.775
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Feb 53.83 51.83 52.32 -1.25
Diesel        
21-Feb 1.6235 1.5724 1.5901 -0.0293
Unleaded Gasoline   $/gallon        
21-Feb 1.5624 1.516 1.5256 -0.0283
Natural Gas        
21-Mar 2.748 2.606 2.714 0.084
Ethanol Futures        
21-Mar     1.641  
U.S. Dollar Index        
21-Mar 90.76 90.195 90.75 0.535
Gold                      $/ounce        
21-Feb 1856.6 1822.1 1829.2 -21.1
Copper        
21-Jan 3.6315 3.5965 3.6055 -0.0625
Fertilizer Swaps     (as of 01/15)  
DAP Tampa-index              405.0 15
DAP-New Orleans              444.8 12
Urea-New Orleans              330.1 34
Urea-Middle East              315.0 19
Urea-Black Sea              287.5 28
UAN (32%) New Orleans              162.6 16.53
 
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