Wheat moves lower again, with corn and soybeans seeing uneven results
Rainy weather in the Plains will help replenish drought-stressed soils there, but the forecasts haven’t been good for wheat prices, which fell again Friday on another round of technical selling. Corn and soybeans were lightly mixed after an uneven round of technical maneuvering, meantime.
Ample rains will continue to make their way through the Central Plains and western Corn Belt through the weekend into early next week, with some areas likely to gather as much as 4” over the next three days, per NOAA’s latest 72-hour cumulative precipitation map. The agency is still predicting widespread seasonally dry conditions in its 8-to-14-day outlook, in contrast, with warmer-than-normal conditions emerging in the Northern Plains and upper Midwest.
On Wall St., the Dow moved another 228 points higher to 32,714 on optimism over the freshly signed coronavirus stimulus bill and prospects for an accelerated reopening of the economy as more people get vaccinated. Energy futures were mixed, with crude oil dropping 0.5% lower and falling back below $66 per barrel, while diesel and gasoline carved out modest gains this afternoon. The U.S. Dollar firmed moderately.
On Thursday, commodity funds were net buyers of corn (+15,000), soybeans (+5,000) and soyoil (+6,000) contracts but were net sellers of soymeal (-2,000) and CBOT wheat (-6,000).
Corn prices tried to overcome overnight losses of 3 to 5 cents during Friday’s session, with mixed results after a round of uneven technical maneuvering. March futures stayed in the red, dropping 5.75 cents to $5.4925, while May futures firmed 1.25 cents to $5.3975. For the week, May futures have fallen 1.8% as planting season moves ever closer in the U.S.
Corn basis bids were steady to narrowly mixed Friday after rising 2 cents higher at an Indiana ethanol plant and tipping a penny lower at an Iowa river terminal today.
Brazil’s government has expressed concerns over the country’s second corn crop, which is facing major delays after recent heavy rains in key production areas, although several private firms are still predicting a record-breaking harvest this season. Last week, consultancy AgRural estimated that planting progress was only at 54% versus 80% last year.
Grain prices have shown plenty of volatility in recent weeks. What’s the likelihood for that trend to continue? Naomi Blohm, senior market adviser with Stewart Peterson, expects some shakeups to continue to happen on more rocky South American weather and a meeting between the U.S. and China next week, among other things. “Buckle up friends, we might have some wild markets next week,” she suggests. Blohm takes a closer look in yesterday’s Ag Marketing IQ blog – click here to learn more.
If you haven’t been to www.FarmFutures.com in a few days, here’s the easiest way to catch up: “7 ag stories you might have missed this week.” This latest round of coverage includes recaps on the new EPA administrator, African swine fever’s return to Asia and more.
The 2021 season is mere weeks away for most Midwestern farmers, and planters have already begun to roll in Texas. If you had perfect weather for planting and nothing breaks down, how much time would it take you to finish? That was the latest question for the Farm Progress PANEL – click here to see how respondents answered.
Preliminary volume estimates were for 222,319 contracts, drifting slightly below Thursday’s final count of 224,982.
Soybean prices moved through a choppy session with not much to show for today’s efforts after ending the session lightly mixed. March futures inched 0.25 cents higher to $14.1575, while May futures slipped half a penny lower to $14.13. A lot of questions remain up in the air for now, especially regarding the exact size of the South American crop and the exact number of acres U.S. farmers end up planting this spring.
Soybean basis bids were steady to mixed Friday, moving as much as 5 cents lower at an Illinois river terminal while firming 5 cents higher at an Indiana processor today.
Ahead of the National Oilseed Processors Association (NOPA) monthly soybean crushing report, out next Monday, a survey of analysts expects NOPA to report a February crush of 168.61 million bushels. If realized, that would move above year-over-year actuals of 166.288 million bushels and become the all-time highest crush for February.
Calling recent weather events “heavy rains” in Brazil may be something of an understatement. Some farms in Mato Grosso were deluged with as much as 10 inches of rains in just a couple of days. Worries of beans sprouting in their pods and unharvested crops remains somewhat prevalent in some areas, per Matthew Kruse, president of Commstock Investments. Click here to learn more.
Researchers at the Food and Agricultural Policy Research Institute (FAPRI) are projecting a collective net farm income of $112 billion this year. That is moderately below 2020’s tally of $121 billion but still well above the average between 2015-19. “Looking ahead, the outlook is uncertain, but certainly more optimistic than it was a few months ago,” according to FAPRI director Patrick Westhoff.
Preliminary volume estimates were for 176,912 contracts, which was slightly higher than Thursday’s final count of 171,222.
Wheat prices continued to erode lower Friday on another round of technical selling. Drought has been a lingering concern for the Plains throughout the fall and winter, but recent rains (with more forecasted into the weekend and early next week) have quelled some of the problem areas. Today, May Chicago SRW futures dropped 4.5 cents to $6.38, May Kansas City HRW futures slipped half a penny lower to $6.0375, and May MGEX spring wheat futures inched 0.25 cents lower to $6.3375.
China is buying a historically large amount of U.S. wheat this marketing year, buying a seven-year high of 106.6 million bushels since June 1, 2020. Of particular note are white wheat bookings, which account for roughly one-third of that total. “Most of the imported wheat is going to the feed sector as corn prices are high and there is profit (to import),” according to Li Hongchao, a senior grains analyst with trade website Myagric.com.
In France, 88% of the country’s soft wheat crop is in good-to-excellent condition through March 8, per the FranceAgriMer consultancy. Quality ratings held steady from a week ago and is well above year-over-year results of 63%, when farmers were dealing with heavy rains.
Preliminary volume estimates were for 58,953 CBOT contracts, falling moderately below Thursday’s final count of 89,300.
|Closing Prices for Key Commodities|
|Live Cattle cents/lb|
|Feeder Cattle cents/lb|
|Lean Hogs cents/lb|
|Crude Oil $/barrel||*Energy prices may not represent final settlements|
|Unleaded Gasoline $/gallon|
|U.S. Dollar Index|
|Fertilizer Swaps||(as of 03/12)|
|UAN (32%) New Orleans||319.7||55.12|
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