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Afternoon Market Recap for May 17, 2021

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Corn recovers slightly, soybeans sag.

Wheat prices also take a tumble in Monday’s session

Corn prices finally caught a break Monday, closing higher for the first time in nearly a week. But yield-friendly weather forecasts created a bearish environment for wheat prices, with some contracts losing more than 3% in a rocky session. Soybeans spent most of the day in the red, but July futures closed with meager gains while August futures ended up down slightly today.

Most of the central U.S. will gather up another 0.25” to 1” additional rainfall between Tuesday and Friday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally wet weather will continue across much of the Corn Belt between May 24 and May 30, with seasonally warm weather likely for the eastern half of the country during this time.

On Wall St., slumping tech stocks pushed the Dow down 72 points in afternoon trading to 34,309. Investors remain cautious after last week’s very volatile ride and are closely watching inflation trends for now.  Energy futures firmed, with crude oil up around 1.5% in afternoon trading to move back above $66 per barrel. Diesel and gasoline rose by similar percentages. The U.S. Dollar softened moderately.

On Friday, commodity funds were net buyers of soybeans (+2,000), soyoil (+8,500) and CBOT wheat (+3,000) contracts but were net sellers of corn (-25,000) and soymeal (-5,000).

Corn

Corn prices attracted some bargain buying today and was further supported by a healthy round of export inspection data from USDA this morning. July futures climbed 8.25 cents to $6.52, while September futures added 2.25 cents to reach $5.6525.

Corn basis bids were steady to mixed to start the week, moving as much as 11 cents higher at a Nebraska processor while sliding as much as 5 cents lower at an Illinois processor today.

Private exporters announced two more large corn sales to USDA this morning. The first is for 66.9 million bushels to China, and the second is for 5.0 million bushels to Mexico. Both sales are for delivery during the 2021/22 marketing year, which begins September 1.

Corn export inspections reached 74.5 million bushels last week, moving 10.3% above the prior week’s tally. It was also on the higher end of trade estimates, which ranged between 51.2 million and 86.6 million bushels. China was the No. 1 destination, with 36.9 million bushels. Cumulative totals for the 2020/21 marketing year widened an already impressive lead over last year’s pace, moving to 1.852 billion bushels.

Analysts expect USDA to show another big round of planting progress in its weekly crop progress report later this afternoon, offering an average trade guess of 84% through May 16. A week ago, 67% of the crop had been planted.

European Union corn imports are down significantly during the 2020/21 marketing year, according to the latest data from the European Commission. Imports were only at 504.3 million bushels through May 16, a year-over-year decline of 30%.

Ukrainian analyst APK-Inform estimates the country’s 2021 corn harvest will reach 1.405 billion bushels. That would be a year-over-year increase of nearly 18%, if realized. Ukraine is one of the world’s top grain exporters.

South Korean importers purchased around 10.4 million bushels of corn from optional origins in a series of deals last Friday. The purchase was comprised of multiple consignments, with the grain set to arrive between September 5 and September 21.

Preliminary volume estimates were for 371,553 contracts, dropping 31% below Friday’s final count of 537,666.

Soybeans

Soybean prices wobbled and finished Monday’s session lightly mixed after a choppy session today. July futures firmed a penny, moving to $15.8725, while August futures dropped 3.75 cents to $15.2375.

Soybean basis bids were steady to soft on Monday, tumbling as much as 17 cents lower at an Illinois river terminal today.

Soybean export inspections improved to 11.3 million bushels. That total was also above the entire range of trade guesses, which came in between 3.7 million and 9.2 million bushels. Japan was the No. 1 destination, with 3.4 million bushels. Cumulative totals for the 2020/21 marketing year are still trending about 61% above last year’s pace, with 2.058 billion bushels.

Ahead of the next USDA crop progress report, out later this afternoon and covering the week through May 16, analysts expect the agency to report 60% of this year’s soybean crop has now been planted, up from 42% a week earlier.

The National Oilseed Processors Association reported an April crush of 160.310 million bushels, falling to the second-lowest monthly total in the past 19 months and spilling well below March’s crush of 177.984 million bushels. That was also below the entire range of trade guesses, which came in between 162.752 million and 172.000 million bushels. Soyoil inventories dropped from 1.771 billion pounds at the end of March to 1.702 billion pounds last month.

European Union soybean imports during the 2020/21 marketing year have reached 483.9 million bushels through May 16, which is trending slightly above last year’s pace. EU soymeal imports are seeing moderate year-over-year declines, meantime, with EU canola imports moderately higher than a year ago.

Preliminary volume estimates were for 140,588 contracts, sliding below Friday’s final count of 176,831.

Wheat

Wheat prices slumped on a round of technical selling largely spurred by improving weather conditions and forecasts across the Great Plains. Winter wheat contracts lost about 0.75%, while spring wheat contracts tumbled 3.5% lower today. July Chicago SRW futures fell 5.75 cents to $7.0150, July Kansas City HRW futures dropped 4.75 cents to $6.53, and July MGEX spring wheat futures lost 27.25 cents to $7.1350.

Wheat export inspections improved another 17% week over week to reach 24.2 million bushels. That was better than the entire range of trade guesses, which came in between 11.0 million and 22.0 million bushels. The Philippines topped all destinations, with 4.1 million bushels. Cumulative totals for the 2020/21 slightly widened its slim lead over last year’s pace, moving to 895.6 million bushels.

Ahead of the next weekly USDA crop progress report, analysts expect the agency to show spring wheat plantings at 86% through May 16, up from 70% a week earlier. For the winter wheat crop, analysts expect quality rating to improve a point, with 50% rated in good-to-excellent condition.

European Union soft wheat exports for the 2020/21 marketing year have reached 861.3 million bushels through May 16, which is down 25% compared to the same time last year. EU barley exports are slightly above last year’s pace, with 315.1 million bushels.

Russia’s SovEcon consultancy estimates that the country’s wheat exports will only reach 29.4 million bushels of wheat in May. Russia is the world’s No. 1 wheat exporter, but sales have slumped significantly since March.

Ukrainian analyst APK-Inform is predicting a 2021 wheat harvest of around 1.014 billion bushels, which is unchanged from the group’s prior estimate. That would be a year-over-year increase of 10.8%, if realized.

Taiwan purchased 3.3 million bushels of milling wheat sourced from the United States in a tender that closed last Thursday. The grain is for shipment starting in July.

Preliminary volume estimates were for 68,852 CBOT contracts, falling sharply below Friday’s final count of 122,568.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Jul 656.75 633 652.5 8.25
21-Sep 572.5 549.25 566.5 2.25
Soybeans        
21-Jul 1603.25 1575.5 1587.5 1
21-Sep 1454 1430.5 1439.75 -7.75
Soymeal                $/ton        
21-Aug 421.1 410.4 410.8 -3
Soyoil                    cents/lb        
21-Aug 65.98 63.19 64.8 0.44
Wheat                    $/bushel        
21-Jul 707.5 692 699.75 -5.75
21-Sep 705.75 691 699.5 -5.75
KC Wheat        
21-Jul 659 643.25 652.25 -4.75
21-Sep 664.25 648.5 657.5 -5
MPLS Wheat        
21-Jul 736.5 703.5 715 -27.25
21-Sep 739.5 709.25 721 -26
Live Cattle             cents/lb        
21-Jun 116.15 114.825 115.45 0.15
Feeder Cattle         cents/lb        
21-Aug 153.075 150.3 152.725 1.575
Lean Hogs             cents/lb        
21-Jul 109.8 107.875 108.775 -0.225
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Jun 66.43 64.83 66.25 0.88
Diesel        
21-Jun 2.0662 2.0301 2.0604 0.0242
Unleaded Gasoline   $/gallon        
21-Jun 2.162 2.1144 2.1592 0.0326
Natural Gas        
21-Jul 3.204 3.071 3.171 0.153
Ethanol Futures        
21-Jul     2.34  
U.S. Dollar Index        
21-Jun 90.415 90.125 90.145 -0.173
Gold                      $/ounce        
21-Jun 1869.3 1841.1 1847.2 9.3
Copper        
21-May 4.727 4.652 4.714 0.05
Fertilizer Swaps     (as of 05/14)  
DAP Tampa-index              589.5 0
DAP-New Orleans              632.2 15
Urea-New Orleans              403.5 4
Urea-Middle East              362.5 13
Urea-Black Sea              337.5 23
UAN (32%) New Orleans              322.4 0
 
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