Afternoon Market Recap for March 4, 2021

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Soybean prices take a wild ride.

Corn and winter wheat close with small losses Thursday

Soybean prices closed with modest gains Thursday, but that hardly told the story of what happened today. Prices moved more than 25 cents higher early in the session but cooled after that as traders attempt to balance a massive incoming South American harvest with vanishing domestic supplies, which are already historically low. Spring wheat contracts also trended slightly higher today, while corn and winter wheat contracts saw small cuts after some technical selling.

If you live north of I-70, you probably won’t see any additional rainfall between Friday and Monday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook still predicts seasonally wet weather for most of the central U.S. between March 11 and March 17, meantime, with seasonally warm weather holding on in the eastern Corn Belt.

On Wall St., the Dow stumbled 478 points lower in afternoon trading to 30,785 after Federal Reserve chair Norman Powell admitted the economic reopening may “create some upward pressure on prices,” which stoked investors’ fears about inflation. Energy prices continued to move higher, with crude oil surging 4% to move close to $64 per barrel amid an OPEC agreement to keep production cuts in place. Diesel climbed 3% higher today, with gasoline up around 2%. The U.S. Dollar firmed moderately.

On Wednesday, commodity funds were net sellers of most grain contracts, including corn (-22,500), soybeans (-5,000), soymeal (-2,500) and CBOT wheat (-8,000) but were net buyers of soyoil (+1,000).

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Corn

Corn prices sputtered late in the session on some technical selling and profit-taking to close modestly lower, although prices were trending slightly higher overnight and this morning. March futures dropped 4 cents to $5.4625, with May futures down 2.75 cents to $5.3250.

Corn basis bids were mixed at several interior river terminals Thursday (moving as much as 6 cents higher and 2 cents lower at those locations) while holding mostly steady elsewhere across the central U.S. today.

Old crop corn sales plummeted to a marketing-year low of 4.6 million bushels. New crop sales only chipped in another 1.5 million bushels, for a total of 6.1 million bushels. That was below the entire range of analyst estimates, which ranged between 17.1 million and 41.3 million bushels. Cumulative totals for the 2020/21 marketing year are still nearly doubling last year’s pace, meantime, with 1.030 billion bushels.

Corn export shipments reached a marketing-year high of 79.1 million bushels, in contrast. Japan (13.8 million) and China (13.6 million) were the top two destinations.

Ahead of the March World Agricultural Supply and Demand Estimates (WASDE) report from USDA, out next Tuesday, analysts expect the agency to show 2020/21 corn stocks at 1.471 billion bushels, falling moderately below February’s tally of 1.502 billion bushels.

Ukrainian farmers could produce as much as 1.339 billion bushels of corn in 2021, according to deputy economy minister Taras Vysotskiy. Total grain exports could rise as much as 17% for the 2020/21 marketing year, he added.

A South Korean feedmill group purchased 2.7 million bushels of corn, sourced from either South America or South Africa, in an international tender that closed earlier today. The grain is for arrival by the end of July.

Yesterday, the House introduced a bill that would require the EPA to “update its greenhouse gas modeling for ethanol and biodiesel to more accurately reflect the environmental benefits of agriculture and biofuels,” reports Farm Futures policy editor Jacqui Fatka. Click here for more details about this bill.

Preliminary volume estimates were for 330,858 contracts, tracking moderately higher than Wednesday’s final count of 244,585.

Soybeans

Soybean prices held onto modest gains Thursday but had moved nearly 30 cents higher earlier in today’s session before significantly cooling off. Traders are continuing to monitor diminishing supplies in the U.S. and a potentially record-breaking crop slowly materializing in Brazil as harvest continues. March futures added 4 cents to $14.1475, and May futures picked up 2.5 cents to $14.10.

Soybean basis bids were mostly steady across the Midwest Thursday but did tip a penny lower at an Ohio elevator today.

Old crop soybean sales moved noticeably higher week-over-week, with 12.3 million bushels. New crop sales added another 7.3 million bushels, for a total tally of 19.6 million bushels. That was on the higher end of trade estimates, which ranged between 3.7 million and 29.4 million bushels. Cumulative totals for the 2020/21 marketing year are still nearly doubling last year’s pace, with 1.936 billion bushels.

Soybean export shipments rose 18% week-over-week but remained 22% below the prior four-week average, with 42.7 million bushels. China was the No. 1 destination, with 11.8 million bushels.

Ahead of next Tuesday’s WASDE report from USDA, analysts think the agency will trim 2020/21 soybean ending stock estimates by another 3 million bushels to 117 million bushels. Individual guesses ranged between 110 million and 125 million bushels.

Brazilian consultancy Datagro is offering one of the most bullish 2020/21 production estimates yet, forecasting a total haul of 4.985 billion bushels this season. Recent rains have set the stage for a “full and record harvest” according to Datagro’s grain coordinator, although those rains are also creating harvest delays.

Egypt purchased 60,000 metric tons of soyoil in an international tender that closed earlier today.

Preliminary volume estimates were for 250,651 contracts, trending 69% above Wednesday’s final count of 148,592.

Wheat

Wheat prices were unable to find any forward momentum after a round of technical selling today. Most contracts faced moderate losses, although spring wheat futures bucked the overall trend after moving fractionally higher. May Chicago SRW futures fell 5 cents to $6.51 and May Kansas City HRW futures dropped 4.75 cents to $6.2125, while May MGEX spring wheat futures inched 0.25 cents higher to $6.4325.

Old crop wheat sales improved 31% week-over-week to reach 8.1 million bushels. New crop sales added another 863,000 bushels for a total of 8.9 million bushels. That was on the lower end of trade estimates, which ranged between 3.7 million and 22.9 million bushels. Cumulative totals for 2020/21 remain modestly behind last year’s pace, with 647.7 million bushels.

Wheat export shipments were mostly stable, tilting 4% above last week’s tally but 5% below the prior four-week average, with just under 15 million bushels. Mexico was the No. 1 destination, with 5.4 million bushels.

Ahead of the next WASDE report from USDA, analysts expect the agency to slightly raise its estimates for 2020/21 wheat stocks by 3 million bushels from February, moving the total to 839 million bushels. Individual guesses ranged between 826 million and 868 million bushels.

A mild winter so far in Russia has improved winter wheat quality ratings for the world’s No. 1 wheat exporter, according to weather forecaster Hydrometcentre. Plantings are also up 6% this year, with 47.691 million acres.

Ukraine had a record-breaking grain harvest in 2019, which the country hopes to best this coming season. That includes an anticipated wheat production ranging between 1.066 billion and 1.102 billion bushels, according to the county’s deputy economy minister. Ukraine exports the majority of its grain on an annual basis.

Algeria is thought to have purchased between 6.6 million and 8.8 million bushels of durum wheat in a tender that closed yesterday. Possible origins in include Canada, Mexico and the United States. Algeria does not disclose final details of the tenders it issues.

Taiwan purchased 3.7 million bushels of wheat from the United States in an international tender that closed earlier today. The grain is for shipment in April and May.

Preliminary volume estimates were for 92,050 CBOT contracts, moving above Wednesday’s final count of 74,181.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 554.25 546 546.25 -4
21-May 541 529.25 532.5 -2.75
Soybeans        
21-Mar 1441 1409.5 1415.25 4
21-May 1438 1403.5 1410.5 2.5
Soymeal                $/ton        
21-May 422.8 415.4 416.6 -2.5
Soyoil                    cents/lb        
21-May 51.77 49.71 50.71 0.93
Wheat                    $/bushel        
21-Mar 658 648.75 649.75 -2.25
21-May 662 647.25 651 -5
KC Wheat        
21-Mar 616.5 616.5 612.75 -1
21-May 632.25 620.5 621 -4.75
MPLS Wheat        
21-Mar 633.75 ERR 635.5  
21-May 649.5 639.5 643.5 0.25
Live Cattle             cents/lb        
21-Apr 119.55 118.5 118.6 -0.8
Feeder Cattle         cents/lb        
21-Apr 141.2 138.4 139.175 -2.125
Lean Hogs             cents/lb        
21-May 89.55 88.5 89.125 -0.225
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 64.86 60.52 64.2 2.92
Diesel        
21-Apr 1.9145 1.8025 1.9016 0.0659
Unleaded Gasoline   $/gallon        
21-Mar 2.0242 1.9166 2.0068 0.055
Natural Gas        
21-May 2.857 2.724 2.782 -0.067
Ethanol Futures        
21-May 1.75 1.75 1.731 -0.035
U.S. Dollar Index        
21-Mar 91.68 90.985 91.64 0.698
Gold                      $/ounce        
21-Apr 1721.6 1687.6 1717.4 2.1
Copper        
21-Mar 4.1565 3.876 3.953 -0.2
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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