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Afternoon Market Recap for December 7, 2021

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Corn claws back into the green.

Wheat prices also firm, while soybeans suffer moderate setback

Grain prices were mixed but mostly higher as traders sought out fresh market-moving fundamental news that may not arrive until Thursday morning when USDA releases its December World Agricultural Supply and Demand Estimates (WASDE) report. Corn prices spilled moderately lower in morning trading but finished the session nearly 0.5% higher. Wheat prices also moved moderately higher today. Soybeans failed to follow suit, closing with losses of around 0.5% to 0.75%.

Some more rain and snow will move across the central U.S. between Wednesday and Saturday, with northern Nebraska, northern Iowa and southern Minnesota likely to see the most accumulations during that time, per the latest 72-hour cumulative precipitation map from NOAA. Snowfall is covering roughly 16.5% of the country today – most notably across most of North Dakota, Minnesota, Wisconsin and Michigan. NOAA’s 8-to-14-day outlook predicts a return to much warmer-than-normal conditions for most of the U.S. between December 14 and December 20, with seasonally wet weather likely for a large portion of the Corn Belt.

On Wall St., stocks jumped higher for the second straight day. The Dow trended 509 points higher in afternoon trading to 35,736 as worries over the omicron variant continue to subside. Rising tech stocks led the charge today. Energy futures also captured big gains, with crude oil tracking 3.5% higher in afternoon trading to move back above $72 per barrel. Gasoline was up nearly 3%, while diesel rose 2.5% and natural gas added 1%. The U.S. Dollar firmed slightly.

On Monday, commodity funds were net buyers of soyoil (+3,000) and CBOT wheat (+2,000) contracts but were net sellers of corn (-4,000), soybeans (-5,500) and soymeal (-7,000).

NOTE: We want to hear from you! The latest Farm Futures grower survey is available here. Please take a few minutes to fill it out – the results help inform future coverage and allows us to report on the issues that matter most to you.

Corn

Corn prices fought through a choppy day Tuesday and were ultimately lifted by a late-session rally, trending nearly 0.5% higher by the close. December and March futures each picked up 2.75 cents, both moving to $5.8625.

Corn basis bids firmed 2 cents higher at an Iowa processor and tilted 2 to 4 cents lower at two other Midwestern locations while holding steady elsewhere across the central U.S. on Monday.

The Biden administration is expected to announce grants totaling $700 million to go towards the biofuel industry later today, and will also announce new biofuel mandates, according to sources familiar with the matter. More details will likely be available later in the day after an official announcement is made.

The European Commission reports that EU corn imports for the 2021/22 marketing year reached 221.6 million bushels through December 5, versus year-over-year results of 292.5 million bushels.

Brazil’s Anec expects the country’s corn exports to reach 136.6 million bushels in December, which would be a year-over-year decline of 9.2%, if realized.

Taiwan purchased 5.1 million bushels of animal feed corn, likely sourced from Argentina, in an international tender that closed earlier today. The grain is for shipment starting in early February.

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Preliminary volume estimates were for 193,336 contracts, trending moderately higher than Monday’s final count of 156,981.

Soybeans

Soybean prices sputtered after another round of technical selling Tuesday, with the primary focus remaining on South American crop potential – there’s almost a 100% consensus right now that Brazil could see record-breaking production this season. January futures dropped 9.5 cents to $12.52, with March futures down 6.25 cents to $12.6025.

Soybean basis bids faded 3 cents lower at an Ohio elevator and firmed 2 to 5 cents higher at two other Midwestern locations while holding steady elsewhere across the central U.S. today.

Private exporters announced to USDA the sale of 4.5 million bushels of soybeans for delivery to unknown destinations during the 2021/22 marketing year, which began September 1.

Brazil’s Anec estimates that the country’s soybean exports will reach 94.8 million bushels in December – a substantial year-over-year increase, if realized (last December, Brazil only exported 5.9 million bushels of soybeans).

The latest customs data shows that Chinese soybean imports in November 314.9 million bushels. The country’s total soybean imports from January to November are down 5.5% from a year ago, at 3.221 billion bushels.

If you’re tired of grappling with multiple black swan events that have affected grain prices in recent months, could the markets be ready for a return to “normal?” Maybe so, according to grain market analyst Bryce Knorr. “After turmoil caused by trade wars and a pandemic, rationality actually appears to be returning to many key markets farmers depend on,” he says. That doesn’t mean volatility will go away, Knorr adds, but it does mean that the models he uses to forecast futures are starting to make sense again “for the most part.” Learn more in today’s Ag Marketing IQ blog.

Preliminary volume estimates were for 318,131 contracts, more than doubling Monday’s final count of 141,581.

Wheat

Wheat prices enjoyed a round of technical buying on Tuesday that pushed some contracts nearly 1% higher. Traders are still scouring the world for news about the latest export and production trends and will get additional supply and demand data in Thursday’s WASDE report from USDA. March Chicago SRW futures picked up 3.5 cents to $8.0875, March Kansas City HRW futures added 5.5 cents to $8.28, and March MGEX spring wheat futures rose 9 cents to $10.3675.

Farmer sentiment continues on its recent downward slide, according to the latest readings from the Ag Economy Barometer from Purdue University / CME Group. November’s reading of 116 fell 5 points from October and is down around 30% from a year ago. Rising input costs were largely to blame. Farmers remain very optimistic about farmland values, meantime. Click here to for additional details.

European Union soft wheat exports during the 2021/22 marketing year have reached 471.8 million bushels through December 5, a year-over-year increase of 11% so far. Frustrations remain over the fact that French data is not current, however (and France is Europe’s top wheat exporter).

Jordan issued an international tender to purchase 4.4 million bushels of milling wheat from optional origins that closes on Thursday. The grain would be for shipment starting in mid-May.

Preliminary volume estimates were for 56,961 CBOT contracts, slipping slightly below Monday’s final count of 61,952.

Settlement Prices for Key Commodities 
  High Low Last Change
Corn               $/bushel      
21-Dec 589.5 579.5 586.25 2.75
22-Mar 588.75 578.5 586 2.75
Soybeans        
22-Jan 1268.5 1243 1250.25 -9.5
22-Mar 1275.5 1252 1258.25 -6.25
Soymeal                $/ton        
22-Jan 353.6 347.4 349.7 -2.7
Soyoil                    cents/lb        
22-Jan 58.86 56.8 57.1 -0.86
Wheat                    $/bushel        
21-Dec 812 796 799.25 2.25
22-Mar 813.5 797.5 808.5 3.5
KC Wheat        
21-Dec 826.5 819 827.25 4.5
22-Mar 831.25 817.25 827.5 5.5
MPLS Wheat        
21-Dec 1035   1045.75  
22-Mar 1038.75 1023.25 1036.5 9
Live Cattle             cents/lb        
21-Dec 138.6 137.95 138.25 0.075
Feeder Cattle         cents/lb        
22-Mar 168.175 166.8 167.55 -0.4
Lean Hogs             cents/lb        
22-Feb 78.875 76.125 76.475 -1.75
Crude Oil  $/barrel *Energy prices may not represent final settlements
22-Jan 73.03 69.52 71.89 2.4
Diesel        
22-Jan 2.2378 2.1747 2.2253 0.0541
Unleaded Gasoline   $/gallon        
22-Jan 2.1234 2.0535 2.104 0.0607
Natural Gas        
22-Feb 3.792 3.626 3.701 0.076
Ethanol Futures        
22-Jan     2.137  
U.S. Dollar Index        
21-Dec 96.59 96.17 96.375 0.045
Gold                      $/ounce        
22-Jan 1786.5 1771.8 1782.8 5.3
Copper        
21-Dec 4.3835 4.3065 4.3405 0.0035
Fertilizer Swaps     (as of 12/03)  
DAP Tampa-index              810.0 0
DAP-New Orleans              824.0 3
Urea-New Orleans              848.2 -42
Urea-Middle East              945.0 0
Urea-Black Sea              910.0 0
UAN (32%) New Orleans              644.9 27.56

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