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Afternoon Market Recap for October 22, 2021

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Spring wheat futures surge past $10.

Winter wheat and corn also post solid gains Friday, while soybeans ease lower

Grain prices were mixed but mostly higher on Friday. Nearby MGEX spring wheat contracts surged 3.3% higher and cleared $10 per bushel for the first time in nearly a decade as 2021’s dismal season continues to provide ample opportunities for technical buying. Winter wheat contracts were also red hot, moving between 2.1% and 3.5% higher today. Corn prices firmed 1% on the ensuing spillover strength, while soybean prices eased around 0.3% lower in a somewhat choppy session.

Between Saturday and Tuesday, plenty of wet weather is expected to develop in a band stretching between northern Missouri and Ohio, with some areas likely to see 1.5” or more during this time, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts a return to seasonally dry weather for the central U.S. between October 29 and November 4, with warmer-than-normal conditions likely for most of the country next week.

On Wall St., the Dow moved another 94 points higher to 35,697 in afternoon trading, with several notable companies (Netflix, Ebay, Microsoft, etc.) climbing to record highs on Friday. Among the 117 3Q corporate earnings reports released so far, 84% have bested analyst expectations. Energy futures were mixed. Crude oil jumped 1.25% higher to move back above $83 per barrel this morning, while diesel dropped more than 0.5% and gasoline fell around 0.25%. The U.S. Dollar softened slightly.

On Thursday, commodity funds were net sellers of all major grain contracts, including corn (-8,000), soybeans (-11,500), soymeal (-2,500), soyoil (-6,500) and CBOT wheat (-6,000).

Corn

Corn prices climbed another 1% higher today, largely due to spillover strength from wheat, which triggered a round of technical buying. Speculation that high input prices will drive 2022 acres down is also keeping prices firm. On the whole, it was a good week for corn prices, with nearby contracts firming 2.3% since Monday’s open. Today, December futures rose 6 cents to $5.3825, while March futures added 4.75 cents to $5.4625.

Corn basis bids were steady to weak across the central U.S. after tilting 1 to 6 cents lower at four Midwestern locations today.

French farm office FranceAgriMer reports that 32% of the country’s corn crop has been harvested through October 18%, up from 18% a week ago but remaining far behind 2020’s pace of 75%. Heavy rains late last month pushed back this season’s harvest timeline, and crop development was already running about 10 days below the prior five-year average. Eighty-nine percent of the crop is rated in good-to-excellent condition, down a point from last week.

La Niña is expected to make an encore appearance for the second straight winter. Among other things, forecasters expect drought to develop in large swaths of Texas, Oklahoma and Kansas as well as the Carolinas, coastal Georgia and the Florida peninsula, according to reporting from Tim Hearden at Western Farm Press. Click here to learn more.

If you haven’t visited FarmFutures.com in a few days, our Friday feature, “7 ag stories you might have missed,” is a quick, easy way to catch up on some of the industry’s top headlines. The latest batch of content includes stories on a proposed IRS change regarding bank reporting, a new $300 million beef plant financed by ranchers, ethanol production trends and more. Click here for details.

Preliminary volume estimates were for 179,728 contracts, facing a moderate decline versus Thursday’s final count of 216,143.

Soybeans

Soybean prices moved moderately lower Friday as traders attempt to weigh strong demand fundamentals with the possibility that more fields will switch to soybeans in 2022 if fertilizer prices stay this high. November futures dropped 4.25 cents to $12.1975, with January futures down 3.75 cents to $12.2975.

Soybean basis bids were steady to weak on Friday, spilling 8 to 14 cents lower at three Midwestern locations while remaining unchanged elsewhere across the central U.S. today.

Just like soybeans, soymeal futures peaked in late spring and have generally waned since then. But are the stars in alignment for a comeback? Naomi Blohm, senior market adviser with Stewart Peterson, takes a look at some of the key factors in play in today’s Ag Marketing IQ blog – click here to learn more.

Fertilizer decisions will be very tough to make when it comes to applications during the 2022 season. That is especially true for foliar soybean applications, which new research reveals could actually reduce profitability. Click here to learn more about the study from the University of Wisconsin-Madison revealed.

Preliminary volume estimates were for 220,886 contracts, coming in a bit higher than Thursday’s final count of 203,093.

Wheat

Wheat prices surged on strong global demand and production challenges in the U.S. and abroad, which triggered more technical buying today. December Chicago SRW futures rose 17 cents to $7.5825, December Kansas City HRW futures climbed 26.25 cents to $7.74, and December MGEX spring wheat futures jumped 32.75 cents higher to $10.18 (eclipsing $10 per bushel for the first time since 2012).

Ukraine, which is expecting record grain production this year, has reached harvest progress of 76.5%, per the country’s agriculture ministry. That includes 1.187 billion bushels of wheat, plus another 440.9 million bushels of corn. Ukraine is among the world’s top exporters of both commodities.

In France, 40% of the 2021/22 soft wheat acreage has been planted through October 18, up from 13% last week and similar to 2020’s pace so far. Winter barley planting progress reached 59%.

Recent rains in key production regions of Argentina has the country’s Buenos Aires Grains Exchange predicting a record wheat harvest this season, with an estimated total of 705.5 million bushels. Harvest has barely begun, with 2% progress, and will continue through January.

Tunisia purchased 1.8 million bushels of soft wheat and 2.3 million bushels of animal feed barley from optional origins in an international tender that closed earlier today. The grain is for shipment in November and December.

War-torn Afghanistan is in the middle of a food crisis, and India recently announced it would send 1.8 million bushels of wheat plus some additional medical aid, after it settles on a transport strategy.

Preliminary volume estimates were for 82,587 CBOT contracts, moving moderately above Thursday’s final count of 54,570.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 540 532 538 6
22-Mar 548 540.75 546.75 4.75
Soybeans        
21-Nov 1230.5 1217 1220.5 -4.25
22-Jan 1240.5 1227 1230.75 -3.75
Soymeal                $/ton        
22-Jan 325.9 321.5 325.4 1.4
Soyoil                    cents/lb        
22-Jan 62.5 61.49 61.62 -0.48
Wheat                    $/bushel        
21-Dec 759.5 743.5 756 17
22-Mar 770.5 756 767.5 16
KC Wheat        
21-Dec 775 750 774 26.25
22-Mar 777.5 755.5 776.5 22.75
MPLS Wheat        
21-Dec 1018 985.5 1013 32.75
22-Mar 993 967.75 988.5 25.25
Live Cattle             cents/lb        
21-Oct 124.975 123.975 124.225 -0.75
Feeder Cattle         cents/lb        
21-Nov 159.075 156.575 156.775 -2.3
Lean Hogs             cents/lb        
22-Feb 77.65 76.3 76.75 0.075
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Nov 83.88 81.76 83.82 1.32
Diesel        
21-Nov 2.5683 2.5274 2.544 -0.0051
Unleaded Gasoline   $/gallon        
21-Nov 2.5065 2.4524 2.489 0.0089
Natural Gas        
21-Dec 5.59 5.336 5.461 0.115
Ethanol Futures        
21-Dec     2.207  
U.S. Dollar Index        
21-Dec 93.78 93.51 93.635 -0.123
Gold                      $/ounce        
21-Nov 1813.5 1785 1793.1 11.9
Copper        
21-Oct 4.559 4.5085 4.518 -0.0685
Fertilizer Swaps     (as of 10/22)  
DAP Tampa-index              650.0 -5
DAP-New Orleans              749.6 -6
Urea-New Orleans              763.4 -6
Urea-Middle East              845.0 15
Urea-Black Sea              765.0 55
UAN (32%) New Orleans              592.5 49.6

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