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Afternoon Market Recap for Oct. 23, 2020

Soybeans recover for double-digit gains.

Corn and wheat also trend moderately higher in Friday’s session

Friday’s session began with a whimper but finished with a bang, after late-session technical buying led to double-digit gains for soybeans and most wheat contracts. Corn also finished with moderate gains today. Export optimism continues to drive prices higher, as does ongoing reports of adverse weather from some major overseas competitors.

Expect cooler weather over the next three days, with at least some measurable rain or snow across most of the central U.S. between Saturday and Tuesday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally cool weather between October 30 and November 5, with drier-than-normal conditions likely for most of the U.S. during this time.

Sputtering tech stocks created some bearish sentiment on Wall St. today, with the Dow dipping 62 points lower this afternoon to 28,301. Energy futures also spilled into the red, with crude oil down nearly 2% and drifting back below $40 per barrel on fears that higher coronavirus cases will negatively affect demand. Diesel dropped nearly 15, with gasoline falling more than 1.5%. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net buyers of most grain contracts, including corn (+8,500), soybeans (+2,000), soymeal (+2,500) and soyoil (+4,000) but were net sellers of CBOT wheat (-5,000).

Corn

Corn prices rose for the eighth time in the past nine sessions on continued export optimism, even as this year’s U.S. harvest hints at a massive production. Prices have been on a clear upward trajectory since early August, with a few hiccups along the way. Prices closed at the highest levels since July 2019. Today, December futures added another 3.75 cents to $4.20, while March futures picked up 2 cents to $4.2025.

Corn basis bids remained steady to firm across the central U.S. after rising 3 to 7 cents higher across a handful of Midwestern locations today. Demand remains high for now, especially after some farmers got rained out of their fields this past week.

Private exporters reported to USDA the sale of 3.9 million bushels of corn for delivery during the 2020/21 marketing year, which began September 1.

Will widespread global worries about food security keep corn prices lifted moving forward? There’s certainly plenty of room for speculation, especially after taking a closer look at China. Click here to learn more.

Speaking of China, the country’s corn imports over the first nine months of 2020 have reached 262.6 million bushels, putting it on pace to eclipse 2019’s total by 72.5%. September imports soared 675% year-over-year after reaching 42.5 million bushels. “China is going to import a lot more grains like barley, sorghum, and corn in the new marketing year, as the domestic (corn) prices would remain high,” according to Xie Jinjiang, an analyst with trade website Myagric.com.

Ukraine’s corn harvest has reached 52% completion through October 22, with a running production of 515.7 million bushels across 6.919 million acres so far. Total grain production is expected to fall 9.3% below 2019’s record harvest.

French consultancy FranceAgriMer estimates that 77% of the country’s 2020 corn crop has been harvested through October 19, versus 64% a week ago.

The nation’s railway industry is getting ready to transport a large portion of this year’s crops, including 54% of U.S. wheat, 21% of soybeans and 19% of corn. Farm Futures policy editor Jacqui Fatka reports on a recent Senate hearing that addressed various logistical factors in play – click here to learn more.

Preliminary volume estimates were for 324,211 contracts, falling a bit short of Thursday’s final count of 342,454.

Soybeans

Soybean prices sputtered most of Friday, but a late-session rally heated up prices and handed out double-digit gains by the close. Domestic and overseas demand optimism has kept prices red-hot this week, with November futures tracking 3.4% higher since Monday’s open. Prices are now at the highest levels in more than four years. November futures climbed 13 cents to $10.8675, with January futures adding 12.75 cents to $10.85.

Soybean basis bids were largely steady across the central U.S. Friday but did tick a penny higher at an Illinois river terminal today.

What will it take for soybeans to climb north of $11 per bushel? That’s one of the many things we discussed in the latest Midweek Markets podcast – click here to listen.

South Korea purchased 117,000 metric tons of soymeal from South America in an international tender that closed earlier today. The grain is for arrival in early April.

How’s harvest going? What are field conditions like in your area? Curious to know what other farmers have faced this season? Be sure to check out the latest Feedback From The Field updates to read up on a fresh batch of farmer anecdotes and view our interactive map. Click here to learn more.

And if you haven’t visited FarmFutures.com in a few days, you can catch up on the top headlines quickly by reading “7 ag stories you might have missed this week.” This week features agtech news, updates on Germany’s African swine fever situation, a new study about how COVID-19 has impacted the agriculture industry and much more.

Preliminary volume estimates were for 265,100 contracts, trending moderately below Thursday’s final count of 326,593.

Wheat

Wheat prices continued to trade higher Friday on concerns over dry weather in the U.S., Russia and South America, among other places. That led to another round of technical buying, with most contracts capturing double-digit gains by the close. December Chicago SRW futures gained 11.75 cents to $6.3450, December Kansas City HRW futures rose 10.75 cents to $6.3450, and December MGEX spring wheat futures picked up 1.5 cents to $5.76.

China’s wheat imports across the first nine months of 2020 have jumped 168% higher year-over-year, with 222.7 million bushels.

France’s 2020/21 wheat planting progress has reached 45% completion through October 19, which was a substantial increase from the prior week’s pace of 19%, according to consultancy FranceAgriMer. Barley planting progress also made significant inroads after moving from 17% a week ago to 60%.

Egypt purchased 6.1 million bushels of wheat from Russia in an international tender that closed earlier today. The grain is for shipment in December.

Taiwan purchased 3.3 million bushels of milling wheat from the United States in an international tender that closed earlier today. The grain is for shipment between December and January.

Jordan issued a new tender to purchase 4.4 million bushels of milling wheat from optional origins that closes October 28. The grain is for shipment in February or March. The country made no purchases in a similar tender that closed Wednesday.

South Korea purchased 2.4 million bushels of animal feed wheat from optional origins in a private deal that closed yesterday. The grain is for arrival in May. Another South Korean buyer purchased an identical amount of animal feed wheat from the United States in a separate private deal that also closed Thursday.

Preliminary volume estimates were for 86,988 CBOT contracts, falling short of Thursday’s final count of 99,795.

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 420 414 419.25 3.75
21-Mar 421.75 416.5 420.25 2
Soybeans        
20-Nov 1088.5 1065.75 1083.75 13
21-Jan 1086 1064.75 1081 12.75
Soymeal                $/ton        
21-Jan 380.3 372.5 379.6 4.6
Soyoil                    cents/lb        
21-Jan 34.05 33.34 33.95 0.43
Wheat                    $/bushel        
20-Dec 635.5 619.5 632.75 11.75
21-Mar 635 620.25 632.5 10.5
KC Wheat        
20-Dec 572.75 556 569.75 10.75
21-Mar 579.5 564.25 576.5 9.75
MPLS Wheat        
20-Dec 581.75 572.5 577.5 1.5
21-Mar 589.25 580.5 587 1.75
Live Cattle             cents/lb        
20-Oct 104.3 103.2 103.375 0.05
Feeder Cattle         cents/lb        
20-Nov 130.55 129.6 129.75 -0.675
Lean Hogs             cents/lb        
21-Feb 67.375 66.2 66.8 -0.05
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Nov 40.92 39.57 39.77 -0.87
Diesel        
20-Nov 1.1694 1.1427 1.1494 -0.0113
Unleaded Gasoline   $/gallon        
20-Nov 1.1627 1.131 1.137 -0.0211
Natural Gas        
20-Dec 3.277 3.176 3.199 -0.073
Ethanol Futures        
20-Dec 1.45   1.495  
U.S. Dollar Index        
20-Dec 93.13 92.645 92.77 -0.194
Gold                      $/ounce        
20-Nov 1913.7 1893 1896.2 -4.9
Copper        
20-Oct 3.1485 3.13 3.1345 -0.0155
Fertilizer Swaps     (as of 10/16)  
DAP Tampa-index              355.0 0
DAP-New Orleans              390.2 -4
Urea-New Orleans              237.6 -2
Urea-Middle East              255.5 -3
Urea-Black Sea              240.0 -1
UAN (32%) New Orleans              132.3 0

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