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Afternoon Market Recap for June 21, 2021

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Soybeans firm on supply, demand fundamentals

Corn and wheat prices mixed to start the week

Grain prices were mixed but mostly higher Monday. Soybeans showed the most upside, gaining momentum on Chinese demand and persistent dry conditions across some key U.S. production areas earlier this month. Corn and wheat prices finished the session with mixed results, meantime. Spring wheat prices showed some promise, tracking about 0.75% higher, while Kansas City HRW contracts faded nearly 1% lower today. Nearby corn contracts moved moderately higher, while September futures dropped nearly 1%.

Iowa will get plenty of rain between Tuesday and Friday, with much of the state set to gather another 1” to 1.5”, per the latest 72-hour cumulative precipitation map from NOAA. The rest of the Midwest and Plains won’t get much more than 0.25” during this time, however. NOAA’s 8-to-14-day outlook predicts seasonally dry weather for the Plains and seasonally wet weather for the eastern Corn Belt between June 28 and July 4.

On Wall St., the Dow jumped 547 points higher in afternoon trading to 33,837 as the market began to recover from last week’s selloff. Fears of inflation and possible interest rate hikes still lurk in the background. Energy futures also rebounded this afternoon, with crude oil up nearly 2.5% to move above $73 per barrel. Gasoline and diesel each gained around 1.5%. The U.S. Dollar softened moderately.

On Friday, commodity funds were net buyers of all major grain contracts, including corn (+17,500), soybeans (+17,500), soymeal (+6,000), soyoil (+6,500) and CBOT wheat (+11,500).

Corn prices were mixed after an uneven round of technical maneuvering today. Crop conditions are on their heels right now, but better forecasts may soon be on the way. July futures firmed 5.25 cents to $6.6050, while September futures dropped 5.5 cents to $5.72.

Corn basis bids were steady to mixed on Monday, moving as much as 5 cents higher at a Nebraska processor while dropping as much as 10 cents lower at an Iowa processor today.

Corn export inspections slid slightly lower week-over-week after reaching 58.3 million bushels. That was also near the middle of trade estimates, which ranged between 47.2 million and 64.0 million bushels. China accounted for more than half of that total, with 31.3 million bushels. Cumulative totals for the 2020/21 marketing year remain far ahead of last year’s pace, with 2.186 billion bushels.

Ahead of the next crop progress report from USDA, out later this afternoon, analysts expect the agency to lower corn quality ratings another two points, with 66% rated in good-to-excellent condition through June 20. Individual estimates ranged between 64% and 67%.

European Union corn imports for the 2020/21 marketing year have reached 561.4 million bushels through June 20, per the latest data from the European Commission. That’s a year-over-year decline of more than 26% versus last year’s pace.

Russia is primarily known for its wheat exports, but consultancy Sovecon estimates the country will see modest corn sales in June totaling just under 8 million bushels. That would be the lowest monthly tally since last October, if realized.

Preliminary volume estimates were for 329,814 contracts, trending 30% lower than Friday’s final count of 473,954.

Soybean prices gathered solid gains on Monday after a flash sale to China this morning sparked a round of technical buying. Widespread dry conditions in the Midwest and Plains through much of June lent additional support. July futures climbed 19.75 cents to $14.1575, with August futures up 16.25 cents to $13.7125.

Soybean basis bids held steady across the central U.S. to start the week. Farmer sales have been generally slow recently amid tight stocks and volatile markets.

Private exporters announced two large soybean sales to USDA this morning. The first was for 12.3 million bushels to China, and the second was for 4.4 million bushels to unknown destinations. Both sales are for delivery during the 2021/22 marketing year, which begins September 1.

Soybean export inspections saw moderate week-over-week improvements after reaching 6.4 million bushels. That was very close to the middle of trade estimates, which ranged between 3.7 million and 11.0 million bushels. Indonesia was the no. 1 destination, with 2.5 million bushels. Cumulative totals for the 2020/21 marketing year remain well ahead of last year’s pace, now at 2.094 billion bushels.

Ahead of Monday afternoon’s crop progress report from USDA, analysts expect to see soybean quality ratings fall another two points, with 60% of the crop rated in good-to-excellent condition through Sunday. Individual estimates ranged between 58% and 61%.

Brazilian farm group Aprosoja estimates the country’s soybean acres will increase another 5.8% this coming season to reach a new record of 98.842 million acres.

European Union soybean imports during the 2020/21 marketing year are trending slightly below last year’s pace, reaching 546.4 million bushels through June 20. EU canola imports are up slightly, in contrast, with EU soymeal imports down moderately year-over-year.

Preliminary volume estimates were for 194,113 contracts, dropping 36% below Friday’s final count of 304,734.

Wheat prices were mixed but mostly higher today. Spring wheat contracts showed the most upside, firming on expectations that crop quality is on the downward slide. September futures added 4.25 cents to $7.7050. September Chicago SRW futures also picked up half a penny to reach $6.6625, while September Kansas City HRW futures spilled 5.5 cents lower to $6.1025.

Wheat export inspections saw another 20.2 million bushels, notching a weekly improvement of 10%. It was also better than all trade estimates, which ranged between 11.0 million and 19.3 million bushels. The Philippines led all destinations, with 3.7 million bushels. Cumulative totals for the young 2021/22 marketing year have started off a bit behind last year’s pace, with 45.7 million bushels since June 1.

Ahead of the next crop progress report from USDA, out later this afternoon, analysts think the agency will show the 2020/21 winter wheat harvest at 16% complete through June 20, up from 4% a week ago. Quality ratings are expected to hold steady, with 48% rated in good-to-excellent condition. Spring wheat quality ratings are expected to erode another two points lower, with 35% of the crop rated in good-to-excellent condition.

Russian consultancy Sovecon estimates the country’s June wheat exports will jump to 88.2 million bushels after a relative slump the prior three months. Russia is the world’s No. 1 wheat exporter.

European Union soft wheat exports during the 2020/21 marketing year have reached 922.3 million bushels through June 20, which is trending nearly 27% below last year’s pace so far. EU barley exports are down slightly year-over-year, reaching 324.7 million bushels.

Preliminary volume estimates were for 121,544 CBOT contracts, falling short of Friday’s final count of 145,829.

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