Afternoon Market Recap for March 2, 2021

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Soybeans soar on more Brazilian harvest delays.

Corn and wheat prices also tack on solid gains Tuesday

Grain prices were back in the green Tuesday – and in a major way. Soybean prices moved more than 1.5% higher on reports of rainy weather in Brazil that is causing further delays to an already sluggish harvest there. Corn prices also shot up on uncooperative weather in South America, with a particular focus on the latest round of dry, hot weather in Argentina. And deteriorating quality conditions in the U.S. Plains helped push some winter wheat contracts nearly 3% higher. Spring wheat contracts also grabbed double-digit gains in today’s session.

Some wet weather could return to the Central Plains between Wednesday and Saturday, but most of the central U.S. won’t see any more measurable moisture during this time, per the latest 72-hour cumulative precipitation map from NOAA. Seasonally wet weather is more likely between March 9 and March 15, per NOAA’s latest 8-to-14-day outlook, meantime, with warmer-than-normal conditions likely for most of the U.S. next week.

On Wall St., the Dow inched 5 points lower to 31,530, taking a breather after posting significant gains yesterday. Investors remained focused on the balance between optimism over the COVID-19 vaccine rollout versus pessimism over the possibility of rising interest rates and inflation. Energy futures faded, with crude oil down 1.25% this afternoon to fall back below $60 per barrel. Diesel dropped 0.4%, with gasoline easing 0.3%. The U.S. Dollar also softened moderately today.

On Monday, commodity funds were net sellers of all major grain contracts, including corn (-22,500), soybeans (-10,000), soymeal (-1,500), soyoil (-5,500) and CBOT wheat (-7,000).

NOTE: Farm Futures regularly surveys our audience about a variety of production and management topics. The responses help inform future content – please take a few minutes to participate here.

Corn

Corn prices saw healthy gains as bullish fundamentals returned to the forefront today. A new large corn sale announced this morning fueled some optimism, as did growing concerns about the latest round of hot, dry weather in Argentina. March futures climbed 13 cents to $5.6050, while May futures picked up 6 cents to reach $5.4425.

Corn basis bids were mixed Tuesday after rising 7 cents at an Illinois river terminal and 2 cents at a Nebraska processor while slipping a penny lower at an Ohio elevator. Other locations across the central U.S. held steady today.

Private exporters announced to USDA the sale of 6.9 million bushels of corn for delivery to Japan during the 2021/22 marketing year, which begins September 1.

Taiwan purchased 2.6 million bushels of animal feed corn, likely sourced from Argentina, in an international tender that closed earlier today. The grain is for shipment between late April and mid-May.

Don’t sleep on your crop insurance decisions this year, warns grain market analyst Bryce Knorr. The deadline is rapidly approaching. “Figuring how these programs fit into your marketing plan is a crucial chore before the real work of planting begins soon,” he notes. Knorr takes a deep-dive look into your options in yesterday’s Ag Marketing IQ blog – click here to learn more.

And if you’re on the hunt for a good crop budgeting tool, here’s a rundown of several free, easily accessible options to help get you started.

Preliminary volume estimates were for 304,364 contracts, moving moderately above Monday’s final count of 254,817.

Soybeans

Soybean prices found substantial footing on a round of technical buying today spurred by continuing weather woes in South America, which is trying to get its 2020/21 crop harvested in adverse conditions. March futures climbed 21.5 cents to $14.14, with May futures up 21.75 cents to $14.13.

Soybean basis bids were steady to narrowly mixed Tuesday after rising 2 to 3 cents at two Midwestern processors and dipping 1 to 2 cents lower at two other central U.S. locations today.

Weather firm Maxar is predicting widespread rains across the Brazilian state of Mato Grosso over the next week, which should trigger further harvest delays. Brazil is already off to the slowest harvest pace in a decade, but most experts are still forecasting a record-breaking crop that should come in somewhere around 4.8 – 4.9 billion bushels this season.

Egypt’s state grains buyer issued an international tender to purchase at least 30,000 metric tons of soyoil and 10,000 MT of sunflower oil for arrival in the first half of May. Bids are due Thursday.

Purdue University and CME Group’s latest Ag Economy Barometer is out, and it shows stable month-over-month readings of 165 (anything over 100 is considered net positive), dipping 2 points lower since February. “The ongoing strength in ag commodity prices and farm income continue to support producers’ perspective on current conditions,” according to Purdue’s James Mintert. “At the same time, concerns about possible policy changes affecting agriculture, and eroding confidence in future growth in ag trade, continue to weigh on producers’ future expectations.”

Do you follow the ABCs of task management? That is, sorting your to-do list into three categories – A (critical), B (enabling) and C (nice to have). Farm Futures executive editor Mike Wilson elaborates in his latest “The Business of Farming” blog – click here to learn more.

Preliminary volume estimates were for 186,587 contracts, tilting slightly below Monday’s final count of 191,295.

Wheat

Wheat prices trended substantially higher Tuesday on a round of technical buying that was largely spurred by deteriorating crop conditions in the Central and Southern Plains. May Chicago SRW futures gained 16.5 cents to $6.6675, May Kansas City HRW futures rose 11.75 cents to $6.35, and May MGEX spring wheat futures added 12.5 cents to $6.46.

Winter wheat quality ratings in Kansas, the No. 1 production state, continue to fall. USDA reported Monday afternoon that only 37% of the crop was rated in good-wo-excellent condition, down from 40% a week ago. No. 2 production state Texas was also down week-over-week, moving from 30% rated in good-to-excellent condition down to 28%.

Ukraine has burned through nearly 80% of its 2020/21 wheat export quota, per the latest data from the country’s economy ministry. Total export volume is at 503.4 million bushels through March 1. Ukraine is expected to export another 34.9 million bushels of wheat in March.

Importers in the Philippines reissued a tender to purchase 5.3 million bushels of milling and animal feed wheat that closes March 4, and is for delivery between April and June. The group passed on all offers in a similar tender last week.

Japan issued a regular tender to purchase 3.0 million bushels of food-quality wheat from the United States and Canada that closes later this week. Roughly two-thirds of the total is expected to be sourced from the U.S.

Preliminary volume estimates were for 94,051 CBOT contracts, trending 13% above Monday’s final count of 82,965.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 564 542 560.75 13
21-May 548.5 531.5 545 6
Soybeans        
21-Mar 1416 1383.5 1414 21.5
21-May 1416.5 1380.75 1412.5 21.75
Soymeal                $/ton        
21-May 423.1 414.1 421.7 3.8
Soyoil                    cents/lb        
21-May 49.9 48.62 49.66 0.44
Wheat                    $/bushel        
21-Mar 663.25 640 663.25 19.5
21-May 668.75 645.5 666.25 16.5
KC Wheat        
21-Mar 630.75 620 627 16.5
21-May 639 619.5 635.25 11.75
MPLS Wheat        
21-Mar 636 ERR 640.25  
21-May 646.75 630.75 645.25 12.5
Live Cattle             cents/lb        
21-Apr 120 118.575 119.4 0.425
Feeder Cattle         cents/lb        
21-Apr 140.775 138.875 140.4 -0.725
Lean Hogs             cents/lb        
21-May 89 87.45 87.65 -1.925
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 61.21 59.45 59.7 -0.94
Diesel        
21-Apr 1.8406 1.7882 1.8088 -0.0104
Unleaded Gasoline   $/gallon        
21-Mar 1.9651 1.9063 1.9362 -0.0067
Natural Gas        
21-May 2.89 2.798 2.882 0.064
Ethanol Futures        
21-Mar 1.775 1.75 1.775 0.085
U.S. Dollar Index        
21-Mar 91.405 90.73 90.745 -0.291
Gold                      $/ounce        
21-Apr 1737.2 1704.6 1732.6 10.1
Copper        
21-Mar 4.235 4.0595 4.217 0.0975
Fertilizer Swaps     (as of 03/01)  
DAP Tampa-index              580.0 50
DAP-New Orleans              576.0 -4
Urea-New Orleans              388.6 13
Urea-Middle East              392.5 8
Urea-Black Sea              267.5 8
UAN (32%) New Orleans              250.8 14.88

 

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