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Afternoon Market Recap for March 5, 2021

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Grain prices jump higher.

Corn and soybeans post major gains Friday, with wheat up moderatel

Friday put a positive period on a very volatile week after corn prices jumped 3% higher and soybean prices climbed 1.5% higher today. Traders are watching weather in South America, which has often proven adverse this season, along with continued expectations to see domestic and global grain supplies move lower. Wheat followed suit, but gains were more muted, with most contracts up around 0.5% today.

Almost no measurable rain or snow is predicted to fall in the Midwest and Plains between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook still predicts seasonally wet weather will return to the Corn Belt between March 12 and March 18, however, with warmer-than-normal conditions likely for the eastern third of the country next week.

On Wall St., the Dow tracked 400 points higher in afternoon trading to reach 31,324 amid widespread investor optimism over a better-than-expected jobs report and hopes for continued economic recovery. Energy futures also made major inroads today, with crude oil jumping 3.25% higher in afternoon trading to almost reach $66 per barrel. Diesel rose 2.25%, with gasoline up more than 3%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net buyers of soybeans (+1,500) and soyoil (+4,500) contracts but were net sellers of corn (-2,500), soymeal (-2,000) and CBOT wheat (-4,500).

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Corn

Corn prices soared Friday, moving around 3% higher on a wave of technical buying on sound supply and demand fundamentals after spilling to three-week lows yesterday. Domestic and global stocks are likely to fall when USDA releases its next set of data next week, and South America continues to struggle with adverse weather. March futures added 18.25 cents to $5.6450, with May futures up 14.75 cents to $5.4725.

Corn basis bids were steady to soft across the central U.S. Friday after dropping 2 to 3 cents at three Midwestern locations today.

Ahead of the March World Agricultural Supply and Demand Estimates (WASDE) report from USDA, analysts expect to see a modest reduction in 2020/21 world corn stocks, with an average trade guess of 11.190 billion bushels.

Algeria purchased 1.2 million bushels of animal feed corn, likely sourced from Argentina, in an international tender that closed Thursday. The grain is for shipment in mid-April.

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Preliminary volume estimates were for 288,635 contracts, trending moderately below Thursday’s final count of 330,238.

Soybeans

Soybean prices trended about 1.5% higher Friday on a round of technical buying supported by dry weather forecasts for Argentina, with spillover strength from corn lending additional support today. March futures climbed 22 cents to $14.3725, with May futures up 22.75 cents to $14.3325.

Soybean basis bids were mostly steady across the Midwest Friday but did tilt 5 cents higher at an Iowa processor today.

Ahead of the next WASDE report from USDA, out next Tuesday, analysts predict 2020/21 world soybean stocks will see a slight month-over-month decline, moving to 3.037 billion bushels.

Traders remain watchful of weather trends in South America – particularly in Argentina, where 30% of the country’s soybean acres could face enough dry weather over the next 10 days to lead to “severe yield loss,” according to the Commodity Weather Group.

China has developed a new five-year plan to increase food security for the world’s most populous nation. “Measures include creating agricultural belts devoted to large-scale farming and providing sufficient subsidies to motivate grain farmers,” according to recent reporting by Bloomberg – click here to learn more.

Preliminary volume estimates were for 174,234 contracts, shifting moderately below Thursday’s final count of 249,294.

Wheat

Wheat prices followed corn and soybeans higher Friday, closing with moderate gains on some technical buying. May Chicago SRW futures picked up 3.5 cents to $6.5450, May Kansas City HRW futures rose 5.75 cents to $6.2675, and May MGEX spring wheat futures added 3.25 cents to $6.4675.

Ahead of next Tuesday’s WASDE report from USDA, analysts expect the agency to show 2020/21 global wheat stocks inching slightly higher month-over-month, moving to 11.184 billion bushels.

France saw improved winter wheat quality ratings this past week, according to consultancy FranceAgriMer, which estimates that 88% of the crop is in good-to-excellent condition. That’s a point higher than a week ago and far above year-over-year ratings of 64%. The country’s barley crop is also in solid shape, with 84% rated in good-to-excellent condition.

South Korea purchased 4.8 million bushels of animal feed wheat from optional origins in an international tender that closed earlier today. The grain is for arrival in August and September.

The Philippines purchased 2.0 million bushels of animal feed wheat from optional origins in a tender that closed Thursday. The grain is for shipment between March and May.

Preliminary volume estimates were for 77,893 CBOT contracts, falling short of Thursday’s final count of 92,050.
 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Mar 564.75 544.5 562 18.25
21-May 547.5 530 545.5 14.75
Soybeans        
21-Mar 1437.25 1414.25 1434.25 22
21-May 1433.25 1403.25 1430 22.75
Soymeal                $/ton        
21-May 419.8 414.5 418.2 2.8
Soyoil                    cents/lb        
21-May 52.17 50.2 51.8 1.18
Wheat                    $/bushel        
21-Mar 657.5 647 654 4.25
21-May 660.75 646.75 653 3.5
KC Wheat        
21-Mar 617.5   617.25  
21-May 629.75 617 626.25 5.75
MPLS Wheat        
21-Mar 630.75   635.5  
21-May 651 639 643.5 3.25
Live Cattle             cents/lb        
21-Apr 119.325 118.5 119 0.45
Feeder Cattle         cents/lb        
21-Apr 139.925 137.225 139.475 0.5
Lean Hogs             cents/lb        
21-May 90.2 88.875 89.225 -0.175
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Apr 66.4 63.82 66.04 2.21
Diesel        
21-Apr 1.9489 1.8885 1.943 0.047
Unleaded Gasoline   $/gallon        
21-Mar 2.0678 1.9939 2.0666 0.0687
Natural Gas        
21-May 2.787 2.72 2.736 -0.045
Ethanol Futures        
21-May     1.731  
U.S. Dollar Index        
21-Mar 92.225 91.64 91.975 0.331
Gold                      $/ounce        
21-Apr 1705.7 1683 1700.6 0.4
Copper        
21-Mar 4.095 3.928 4.0885 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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