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Afternoon Market Recap for September 17, 2021

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Prices fade as harvest looms.

Corn, soybeans and wheat all spill into the red Friday

Good afternoon! Dry, warm weather is expected across much of the U.S. later in September, which could lead to a smooth, speedy harvest in many areas. That will bring fresh supplies online, which led to some downward pressure that kicked off a round of technical selling in the grain markets today. The result was mild to moderate losses. Corn prices eased 0.35% lower, while soybeans fell nearly 1%. Most winter wheat contracts were down around 0.75% by the close.

Between Saturday and Tuesday, the central U.S. will see variable rains, varying from no measurable moisture to as much as 1.5” or more in some parts of Minnesota, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s 8-to-14-day outlook predicts seasonally hot, dry weather for most of the country between September 24 and September 30, meantime. Through September 14, 58.5% of the country is under some level of drought. That includes most of Minnesota, the Dakotas, Iowa and Nebraska.

On Wall St., the Dow dropped 188 points in afternoon trading to 34,562 as investors remain wary of the current coronavirus case trends, and as they await the next Federal Reserve meeting next week. Energy futures were also in the red today. Crude oil fell 1.25% lower this afternoon to move back below $72 per barrel. Diesel dropped 0.4%, with gasoline down around 0.7%. The U.S. Dollar firmed moderately.

On Thursday, commodity funds were net buyers of soybeans (+1,000), soymeal (+2,500) and CBOT wheat (+2,000) contracts but were net sellers of corn (-4,000) and soyoil (-6,000).

Corn

Corn prices posted modest losses Friday amid some technical selling, but nearby contracts finished the week with gains of nearly 2% thanks to some gains earlier this week. December futures dropped 1.75 cents to $5.2775, with March futures down 2 cents to $5.3475.

Corn basis bids continue to show plenty of variability across the Midwest, moving as much as 18 cents higher at an Illinois river terminal while tumbling as much as 25 cents lower at an Iowa processor on Friday.

IHS Markit Agribusiness offered a new estimate for 2021 U.S. corn production, with 15.046 billion bushels. That’s slightly above USDA’s September estimate of 14.996 billion bushels. The group also estimates harvested area will come in at 85.335 million acres, with average yields of 176.3 bushels per acre.

French farm office FranceAgriMer held the country’s corn quality ratings steady in its latest weekly estimates, with 89% of the crop in good-to-excellent condition through September 13. That’s well above year-over-year ratings of 59%. Harvest is just beginning for Europe’s No. 1 corn producer.

In Ukraine, analyst APK-Inform predicts the country will harvest 1.488 billion bushels of corn in 2021. Ukrainian corn exports are expected to reach 1.181 billion bushels during the 2021/22 marketing year. Ukraine is one of the world’s leading exporters of both corn and wheat.

South Korea purchased 2.6 million bushels of animal feed corn from optional origins in a private deal that recently closed. The grain is for shipment between late October and late November.

To date, USDA has paid out $13.8 billion in Coronavirus Food Assistance Program payments in the second round (CFAP2) and $10.5 billion for CFAP1, per the latest reporting from Farm Futures policy editor Jacqui Fatka. What else may be in store? Click here for the latest updates.

Preliminary volume estimates were for 168,158 contracts, drifting slightly below Thursday’s final count of 174,066.

Soybeans

Soybean prices faced moderate cuts after a round of technical selling today, although another flash sale to China reported this morning kept losses somewhat in check. Favorable weather forecasts across much of the central U.S. through the end of September is creating ample downward pressure in the short-term, meantime. November futures eroded 11.75 cents to $12.8425, with January futures down 12 cents to $12.9275.

Soybean basis bids were steady to firm at interior river terminals on Friday after rising 2 to 16 cents higher at three locations. Bids held steady elsewhere across the central U.S. today.

Private exporters announced to USDA the sale of 4.9 million bushels of soybeans for delivery to China during the 2021/22 marketing year, which began September 1.

IHS Markit Agribusiness estimates that 2021 U.S. soybean production will reach 4.381 billion bushels. That’s slightly ahead of USDA’s latest estimate of 4.374 billion bushels. The group also estimates average yields at 50.6 bushels per acre, with harvested area reaching 87.385 million acres.

If you haven’t been to FarmFutures.com in a few days, Friday’s “7 ag stories you might have missed” is an excellent way to quickly catch up. The latest batch of content includes updates on stepped-up basis, a new carbon program from Cargill and much more. Click here for details.

Preliminary volume estimates were for 108,139 contracts, slipping slightly below Thursday’s final count of 112,535.

Wheat

Wheat prices were on their heels Friday after spillover weakness from a broad range of other commodities triggered a round of technical selling that pushed some contracts down as much as 1.2%. December Chicago SRW futures fell 5.75 cents to $7.0725, December Kansas City HRW futures dropped 7 cents to $7.1350, and December MGEX spring wheat futures lost 11 cents to $8.9550.

IHS Markit Agribusiness estimates that all-wheat plantings in the U.S. for 2022 will move 3.3% higher year-over-year to 48.5 million acres. That estimate assumes 34.755 million acres of winter wheat, 11.8 million acres of spring wheat and 1.95 million acres of durum.

Analyst APK-Inform anticipates Ukraine’s 2021 wheat production will reach 1.146 billion bushels. The consultancy also predicts Ukraine will export roughly 772 million bushels of wheat during the 2021/22 marketing year.

Australia is gearing up for a second consecutive bin-busting wheat crop for the 2021/22 season, which forecasters have pegged at 1.198 billion bushels. If realized, that would be the second-highest wheat production for Australia on record, second only to 2020/21. Producers are fighting through pandemic-related logistical challenges that include machinery and labor shortages.

South Korea purchased 3.0 million bushels of wheat from Australia earlier this week. The grain is for shipment in February and March.

Preliminary volume estimates were for 45,439 CBOT contracts, moving below Thursday’s final count of 58,485.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
21-Dec 530.5 521.75 527.25 -1.75
22-Mar 537.75 529.75 534.25 -2
Soybeans        
21-Nov 1298.5 1278.25 1284 -11.75
22-Jan 1307 1287 1293 -12
Soymeal                $/ton        
21-Dec 344.7 341.2 342.2 -1.9
Soyoil                    cents/lb        
21-Dec 57.05 55.51 56.26 -0.59
Wheat                    $/bushel        
21-Dec 716 706.5 708.75 -5.75
22-Mar 726.5 717.75 719.75 -6.25
KC Wheat        
21-Dec 723 712.25 713 -7
22-Mar 731.5 721 721.75 -6.75
MPLS Wheat        
21-Dec 909 895.5 900.5 -11
22-Mar 897 884 888.75 -10
Live Cattle             cents/lb        
21-Oct 123.5 122.525 122.925 -0.675
Feeder Cattle         cents/lb        
21-Oct 157.4 155.925 156.275 -0.825
Lean Hogs             cents/lb        
21-Dec 75.375 72.675 74.9 0.45
Crude Oil  $/barrel *Energy prices may not represent final settlements      
21-Oct 72.72 71.21 72.07 -0.54
Diesel        
21-Oct 2.2188 2.1909 2.2105 -0.0005
Unleaded Gasoline   $/gallon        
21-Oct 2.1844 2.1475 2.1777 -0.0035
Natural Gas        
21-Nov 5.435 5.089 5.103 -0.279
Ethanol Futures        
21-Nov     2.207  
U.S. Dollar Index        
21-Dec 93.2 92.745 93.17 0.251
Gold                      $/ounce        
21-Oct 1765.4 1745.4 1750 -4.6
Copper        
21-Sep 4.3405 4.235 4.247 -0.0315
Fertilizer Swaps     (as of 09/17)  
DAP Tampa-index              655.0 0
DAP-New Orleans              740.2 24
Urea-New Orleans              577.6 -8
Urea-Middle East              497.5 33
Urea-Black Sea              450.0 12
UAN (32%) New Orleans              325.2 0

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