Afternoon Market Recap for Oct. 28, 2020

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COVID-19 anxiety short-circuits grain prices

Spike in coronavirus cases in the U.S. and overseas triggers broad commodity selloff

Anxiety over a rise in global coronavirus cases sparked a selloff that started in the stock markets and quickly worked its way through other commodities, including energy, metal and others. Grain prices were not spared, with corn and soybeans both posting double-digit losses Wednesday. Wheat prices saw a more moderate decline, with most contracts limiting losses to less than 1% today.

Wet weather later this week will be mostly relegated to the lower Midwest and eastern Corn Belt, with some areas likely to see another 2” or more between Thursday and Sunday, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts widespread seasonally dry, warm weather between November 4 and 10, meantime.

On Wall St., the Dow tilted 802 points lower in afternoon trading to 26,661 on worries about how rising coronavirus cases might affect the global economy. There have been more than 44 million cases so far worldwide, with more than 9 million cases in the U.S. The selloff stretched into the energy market, where crude oil crumbled more than 5.5% lower to fall below $38 per barrel. Gasoline was also down around 5.5%, while diesel dropped nearly 4%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net sellers of all major grain contracts, including corn (-4,500), soybeans (-5,000), soymeal (-3,000), soyoil (-2,000) and CBOT wheat (-2,500).

Corn prices followed a broad range of other commodities lower in Wednesday’s selloff, closing more than 3% lower after taking a double-digit hit today. December futures dropped 14.25 cents to $4.0175, with March futures down 12.5 cents to $4.04.

Corn basis bids were steady to mixed Wednesday, moving as much as 5 cents in either direction today. Farmers sales have slowed in recent days after prices fell below 14-month highs earlier this week.

Private exporters reported to USDA the sale of 8.1 million bushels of corn for delivery to South Korea for delivery during the 2020/21 marketing year, which began September 1. The sale is an optional-origin contract that allows the grain to be sourced from the U.S. plus one or more other countries.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect the agency to show corn sales ranging between 27.6 million and 59.1 million bushels for the week ending October 22.

South African farmers are likely to plant 5% more corn acres for the 2020/21 season amid more favorable weather conditions and higher prices, per the country’s Crop Estimates Committee. Total acres could reach 6.786 million acres.

A South Korean feed association purchased 2.4 million bushels of animal feed corn in a private deal Wednesday and was likely sourced from either South America or South Africa. The grain is for shipment between mid-December and mid-January.

Preliminary volume estimates were for 604,620 contracts, firming significantly above Tuesday’s final count of 402,230.

Soybean prices were also caught in the crosshairs of a broad commodity selloff Wednesday, closing around 2% lower after a round of technical selling. Soymeal and soyoil futures closed with similar losses. Beneficial rains landing on Brazil created additional headwinds today. November futures tumbled 23.25 cents to $10.59, while January futures lost 19.75 cents to $10.5675.

Soybean basis bids were steady to mixed Wednesday, firming 4 to 5 cents higher at three Midwestern processors while falling 3 to 4 cents lower at two interior river terminals today.

Private exporters reported two more large soybean sales to USDA today. The first was for 4.0 million bushels to Egypt, and the second was for 4.4 million bushels to unknown destinations. Both sales are for delivery during the 2020/21 marketing year, which began September 1.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show soybean sales ranging between 36.7 million and 73.5 million bushels for the week ending October 22.

Analysts also expect to see another 100,000 to 450,000 metric tons of soymeal sales last week, plus 5,000 to 40,000 MT of soyoil sales.

What keeps you up at night? We polled our readers and got more than 800 responses. “Grain markets and debt topped the list, followed by health, weather, COVID concerns, and politics,” notes Mike Wilson, executive editor. Click here to read more about what this poll revealed.

Recent rains (and snow, in some cases) but a kink in some growers’ harvest plans, according to the latest responses to Feedback From The Field. “Harvest will be at a standstill for quite a while for those still needed to harvest soybeans,” noted one Ohio farmer. Click here to read more farmer anecdotes from around the country and view our interactive map.

Preliminary volume estimates were for 380,162 contracts, moving moderately above Tuesday’s final count of 311,187.

Wheat prices saw moderate declines on spillover weakness from a broad range of other commodities, but losses were relatively muted compared to corn and soybeans. December Chicago SRW futures dropped 5 cents to $6.1075, December Kansas City HRW futures fell 4.75 cents to $5.4450, and December MGEX spring wheat futures lost 7.5 cents to $5.54.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 25.7 million bushels for the week ending October 22.

Jordan purchased 4.4 million bushels of hard milling wheat from optional origins in a tender that closed earlier today. The grain is for shipment between late February and early March.

South Korean flour mills purchased 4.2 million bushels of milling wheat from the United States and Canada in a tender that closed earlier this week. Of the total, 74% is expected to be sourced from the U.S. The grain is for shipment in January.

Japan plans to import nearly 600,000 bushels of feed-quality wheat in a simultaneous buy-and-sell auction that closed earlier today. The grain is for arrival in late February.

Preliminary volume estimates were for 124,150 CBOT contracts, tracking 24% higher than Tuesday’s final count of 99,730.

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