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Afternoon Market Recap for October 15, 2021

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Export optimism pushes grains higher.

Corn, soybeans and wheat rise 1% to 2% on Friday

Grain prices continued to recover on Friday after stumbling earlier in the week, after the focus returned on export optimism as sales picked up this week. Rising prices overseas lent additional support today, as did gains in a broad range of outside commodities. Corn prices rose nearly 2%, while soybeans were up around 1% and some wheat contracts trended as much as 1.75% higher on the ensuing round of technical buying.

Almost no measurable rains will fall west of the Mississippi River between Saturday and Tuesday, although parts of the eastern Corn Belt could see some light showers over the next three days, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts drier-than-normal conditions will return to the eastern Corn Belt between October 22 and October 28, meantime, with seasonally warm weather likely for much of the central U.S. during that time.

On Wall St., a strong start to “earnings season” lifted the Dow 394 points higher in afternoon trading to 35,307. Strong performances by bank stocks led the way today. Energy prices remained in the green again, with crude oil up more than 1% this afternoon to stay above $82 per barrel. Gasoline jumped nearly 2% higher, with diesel up around 0.5%. The U.S. Dollar firmed slightly.

On Thursday, commodity funds were net buyers of all major grain contracts, including corn (+5,500), soybeans (+6,000), soymeal (+2,500), soyoil (+2,500) and CBOT wheat (+4,500).

Corn

Corn prices captured double-digit gains and closed Friday’s session nearly 2% higher on a round of technical buying largely spurred by bullish export sentiment and spillover strength from other commodities. December and March futures each rose 10.25 cents to close at $5.27 and $5.36, respectively.

Corn basis bids dropped 4 cents lower at an Ohio elevator and an Illinois river terminal while firming 3 cents higher at an Iowa processor and holding steady across other Midwestern locations on Friday.

Corn export sales were up 85% from the prior four-week average, with 40.9 million bushels for the week ending October 7. That was near the middle of trade guesses, which ranged between 27.6 million and 63.8 million bushels. Cumulative totals for the 2021/22 marketing year remain moderately below last year’s pace for now, with 134.4 million bushels since the start of September.

Corn export shipments slid 6% lower from a week ago but remained 58% above the prior four-week average, with 36.1 million bushels. Mexico was the No. 1 destination, with 14.4 million bushels.

France has harvested 15% of its 2021 corn crop through October 11, per the farm office FranceAgriMer. While that’s up from 7% a week earlier, it’s severely behind 2020’s pace of 62%.

Preliminary volume estimates were for 200,046 contracts, falling moderately below Thursday’s final count of 238,865.

Soybeans

Soybean prices also found double-digit gains today, thanks to a flurry of new flash sales reported to China and unknown destinations this morning (keep reading for more details on those). November futures climbed 12.25 cents to $12.1850, with January futures up 12 cents to $12.2750.

Soybean basis bids were steady to mixed on Friday, moving as much as 9 cents higher at an Illinois river terminal while falling as much as 10 cents lower at a Nebraska processor today.

Private exporters announced three more large soybean sales to USDA Friday morning. The first was for 14.6 million bushels for delivery to unknown destinations. A second sale was also reported to unknown destinations, totaling 12.0 million bushels. And a third sale to China totaled 4.9 million bushels. All three sales are for delivery during the 2021/22 marketing year, which began September 1.

Soybean export sales stayed 9% above the prior four-week average, with 42.2 million bushels. That was also toward the higher end of trade estimates, which ranged between 22.0 million and 52.2 million bushels. Cumulative totals for the 2021/22 marketing year are still well below last year’s pace, with 133.3 million bushels.

Soybean export shipments were even more robust last week, with another 63.0 million bushels. China was by far the No. 1 destination, with 47.2 million bushels.

The National Oilseed Processors Association reported earlier today that domestic soybean crushing volume in September fell 3.2% month-over-month to 153.800 million bushels. Analysts were expecting a bigger total, with an average trade guess of 155.072 million bushels.

Soymeal exports were also down last month, according to NOPA, moving from 856,619 metric tons in August down to 603,545 MT. Soyoil stocks moved higher for the third consecutive month, to 1.684 billion pounds.

Grain prices have had a wild ride so far in 2021 – from a significant swing higher earlier this year to the latest downturn. Naomi Blohm, senior market adviser with Stewart Peterson, looks at eight charts that better explain the ongoing situation in the latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 218,641 contracts, trending 11% lower than Thursday’s final count of 246,040.

Wheat

Wheat prices followed corn, soybeans and a bevy out outside commodities higher Friday. A solid round of export sales data from USDA this morning encouraged additional technical buying today. December Chicago SRW futures added 8.75 cents to $7.3350, December Kansas City HRW futures rose 13 cents to $7.44, and December MGEX spring wheat futures gained 8.75 cents to $9.6875. The spring wheat rally has been particularly impressive, rising nearly $1 per bushel higher since early September.

Wheat export sales jumped 70% higher week-over-week and 42% above the prior four-week average, to 20.9 million bushels. That was also better than the entire range of trade guesses, which came in between 9.2 million and 19.1 million bushels. Cumulative totals for the 2021/22 marketing year are now at 301.7 million bushels, which is about 18% below last year’s pace so far.

Wheat export shipments shifted 16% lower week-over-week and 5% below the prior four-week average, to 16.9 million bushels. Japan topped all destinations, with 4.6 million bushels.

China plans to auction 3.7 million bushels of its state wheat reserves next Wednesday and could offer a similar flurry of auctions later this fall to whittle down its domestic stockpile. Some estimates peg China’s 2021/22 wheat production potential at more than 1.320 billion bushels.

Russia’s wheat exports reached 709.7 million bushels between January and August, trending 1.6% below volume from the first eight months of 2020. However, because of stronger prices, the value of this year’s exports has trended 15% higher year-over-year.

French farm office FranceAgriMer estimates that 13% of the country’s 2021/22 soft wheat crop has been planted through October 11, up from 4% a week ago. The country’s winter barley crop plantings moved to 24%, versus 9% last week.

Preliminary volume estimates were for 64,021 CBOT contracts, slipping slightly below Thursday’s final count of 69,465.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                   cents/bu    
21-Dec 528.5 514.25 525.75 10.25
22-Mar 537 523.5 534.25 10.25
Soybeans        
21-Nov 1221 1202 1217.75 12.25
22-Jan 1229 1211.5 1226.25 12
Soymeal                $/ton        
22-Jan 320.5 314.8 317.4 2.2
Soyoil                    cents/lb        
22-Jan 61.24 60.13 61.09 0.84
Wheat                    $/bushel        
21-Dec 740.5 722.25 734 8.75
22-Mar 752.75 734.75 746.5 9.5
KC Wheat        
21-Dec 748 729.5 743.75 13
22-Mar 755 737.25 750.75 12.25
MPLS Wheat        
21-Dec 980 957.5 968.75 8.75
22-Mar 967.25 945 957.25 8.5
Live Cattle             cents/lb        
21-Oct 126 125.375 125.75 0
Feeder Cattle         cents/lb        
21-Nov 161.95 160.9 161.2 -0.95
Lean Hogs             cents/lb        
21-Dec 81.775 80.35 81.075 0.775
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Nov 82.49 81.39 82.23 0.92
Diesel        
21-Nov 2.5997 2.5574 2.5698 0.0084
Unleaded Gasoline   $/gallon        
21-Nov 2.4888 2.432 2.4817 0.0467
Natural Gas        
21-Dec 5.94 5.591 5.619 -0.218
Ethanol Futures        
21-Dec     2.207  
U.S. Dollar Index        
21-Dec 94.07 93.85 93.94 -0.021
Gold                      $/ounce        
21-Nov 1796.8 1766.3 1766.6 -30.1
Copper        
21-Oct 4.708 4.6105 4.7065 0.075
Fertilizer Swaps     (as of 10/15)  
DAP Tampa-index              655.0 0
DAP-New Orleans              755.1 0
Urea-New Orleans              768.9 0
Urea-Middle East              830.0 0
Urea-Black Sea              710.0 0
UAN (32%) New Orleans              542.9 22.05

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