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Afternoon Market Recap for Sept. 24, 2020

Soybeans suffer double-digit setback.

Corn also slumps lower in Thursday’s session, while wheat finds small gains

Grain prices were mixed but mostly lower Thursday. Traders largely ignored a solid round of export sales data for both corn and soybeans this morning, instead opting to engage in a round of technical selling for the fourth consecutive session. Harvest pressure continues to generate significant headwinds. Wheat bucked the overall trend, with most contracts inching around 0.3% higher on some light technical buying and short-covering.

Drought’s footprint across the U.S. increased slightly this past week, with 58.5% of the country now affected through September 22, per the latest updates to the U.S. Drought Monitor. In the Midwest, 33.4% of the region is affected, up from 31.6% a week ago. Problem areas of note include most of Iowa and Indiana, plus central Illinois and southern Michigan. NOAA’s 8-to-14-day outlook predicts seasonally dry weather will continue through the first week of October for most of the country.

On Wall St., tech stocks swung back into the green, which helped push the Dow 165 points in afternoon trading to 26,928. Energy futures also found moderate gains today. Crude oil rose nearly 1% higher this afternoon to move back above $40 per barrel. Gasoline tracked more than 1% higher, with diesel up around 0.6%. The U.S. Dollar softened slightly.

The U.S. House of Representatives passed a stopgap funding bill that will keep the federal government open through December 11. Among many other things, the bill would provide $30 billion for USDA’s Commodity Credit Corp. Coronavirus stimulus negotiations are ongoing. Click here to learn more.

On Wednesday, commodity funds were net sellers of most grain contracts, including corn (-1,000), soybeans (-4,000), soyoil (-5,000) and CBOT wheat (-8,000) but were net buyers of soymeal (+4,000).

Corn

Corn prices sputtered again Thursday, dropping nearly 1.5% in a somewhat choppy session and falling below the 20-day moving average for the first time in six weeks. December futures dropped 5.25 cents to $3.6325, while March futures lost 5.5 cents to close at $3.72.

Corn basis bids were mixed at Midwestern processors Thursday (moving as much as 4 cents higher and 2 cents lower) while holding steady at most other central U.S. locations today.

Corn export sales came in strong at 84.2 million bushels, anchored by a big turnout to China (22.3 million bushels). That was above all trade estimates, which ranged between 41.3 million and 70.9 million bushels. Cumulative totals for the 2020/21 marketing year are trending moderately above last year’s pace so far.

Corn export shipments were for 33.3 million bushels. China was the No. 1 destination, taking nearly a quarter of the total with 8.0 million bushels.

The International Grains Council lowered its estimates for global corn production in 2020/21 based on expected reductions in U.S. yields. However, the group still currently estimates a record production of 1.16 billion metric tons. “While the outlook for demand is somewhat opaque because of the pandemic, there are signs that grains consumption is holding up well,” IGC also noted in its latest report.

When is the best time to buy calls or puts? Matthew Kruse, president of Commstock Investments, walks through some factors to consider in the latest Ag Marketing IQ blog. Click here to learn more.

Preliminary volume estimates were for 231,540 contracts, shifting moderately above Wednesday’s final count of 186,049.

Soybeans

Soybean prices struggled through a choppy session Thursday, gathering double-digit losses in the process. Harvest progress in recent days has drummed up an atmosphere ripe for technical selling and profit-taking after prices rose to the highest levels in more than two years late last week. November futures dropped 15.75 cents to $9.9875, with January futures falling 16.75 cents to $10.02.

Soybean basis bids were steady across most Midwestern locations Thursday with one notable exception – an Iowa processor jumped 32 cents higher today.

Soybean export sales climbed to 117.4 million bushels last week, with China accounting for 59% of that total. Analyst estimates fell below that mark, with trade guesses ranging between 73.5 million and 110.2 million bushels. Cumulative totals for the 2020/21 marketing year are outmatching last year’s pace so far.

Soybean export shipments were also robust, with another 47.1 million bushels last week. China accounted for more than half of that total, with 28.3 million bushels.

The International Grains Council’s estimates for 2020/21 global soybean production held steady, at 13.705 billion bushels. Global soybean consumption is not far behind, at an estimated 13.558 billion bushels.

How are your field conditions? Curious to know how other farmers around the country are faring? Don’t miss the latest batch of Feedback From The Field updates, which include a bevy of farmer anecdotes and an interactive map. Click here to learn more.

Preliminary volume estimates were for 290,570 contracts, moving moderately above Wednesday’s final count of 214,081.

Wheat

Wheat prices overcame overnight losses to move slightly into the green in Thursday’s session as traders engaged in some light technical buying and short-covering. December Chicago SRW futures added 2 cents to $5.51, December Kansas City HRW futures inched ahead 0.25 cents to $4.8450, and December MGEX spring wheat futures picked up 2.25 cents to $5.3525.

Wheat export sales were less impressive last week, sliding 34% below the prior four-week average to 12.9 million bushels. Analysts were generally expecting a more robust tally, with trade guesses ranging between 9.2 million and 22.0 million bushels. South Korea was the top buyer, with 4.1 million bushels. Cumulative totals for the 2020/21 marketing year are still maintaining a slim lead over last year’s pace, with 299.2 million bushels.

Wheat export shipments were also 21% below the prior four-week average, with 17.2 million bushels. Japan was the No. 1 destination, with 3.5 million bushels.

Yield-replenishing rains are expected to fall in parched areas of Argentina this weekend. The country’s Buenos Aires Grains Exchanges estimated that 60% of the current wheat crop is seeing “average to very dry” conditions so far. Production estimates are for 643 million bushels, which would represent a 7% drop from last year, if realized.

Japan purchased 3.2 million bushels of food-quality wheat from the United States and Canada in a regular tender that closed earlier today. As expected, 68% of that total was sourced from the U.S.

Preliminary volume estimates were for 101,301 CBOT contracts, moving ahead of Wednesday’s final count of 77,468.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Dec 368.25 363 363.25 -5.25
21-Mar 377 371.75 371 -5.5
Soybeans        
20-Nov 1014.75 997.25 998.75 -15.75
21-Jan 1019.25 1001 1002 -16.75
Soymeal                $/ton        
20-Dec 345.1 335.4 336.5 -8.6
Soyoil                    cents/lb        
20-Dec 32.83 32.04 32.41 -0.41
Wheat                    $/bushel        
20-Dec 554.25 541 551 2
21-Mar 561.25 549 558.5 1.5
KC Wheat        
20-Dec 487.5 477.25 484.5 0.25
21-Mar 498 488.25 494.75 -0.25
MPLS Wheat        
20-Dec 536 529 535.25 2.25
21-Mar 548.75 541.75 548 2
Live Cattle             cents/lb        
20-Oct 108.2 106.975 108 0.85
Feeder Cattle         cents/lb        
20-Oct 142.6 141.225 142.2 0.675
Lean Hogs             cents/lb        
20-Dec 64.475 63.05 63.05 -1.3
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Oct 40.37 39.12 40.19 0.26
Diesel        
20-Oct 1.1174 1.095 1.1137 0.0062
Unleaded Gasoline   $/gallon        
20-Oct 1.1984 1.1626 1.1923 0.011
Natural Gas        
20-Nov 2.928 2.775 2.901 0.107
Ethanol Futures        
20-Nov 1.31 1.295 1.31 0
U.S. Dollar Index        
  94.655 94.225 94.34 -0.103
Gold                      $/ounce        
20-Oct 1872.8 1843 1864.5 4.6
Copper        
20-Sep 2.972 2.9295 2.9615 -0.032
Fertilizer Swaps     (as of 9/18)  
DAP Tampa-index              342.5 0
DAP-New Orleans              394.1 -1
Urea-New Orleans              248.6 -3
Urea-Middle East              260.0 -6
Urea-Black Sea              242.5 -4
UAN (32%) New Orleans              132.3 0

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