Soybeans flirt dangerously close to $13/bushel

Corn: Market news has been largely scarce due to the holidays over the past several days, but that didn’t stop corn futures in Chicago from notching six-and-a-half-year highs in today’s trading session. Corn prices largely followed the soybean complex higher, also supported by strong export loading paces.

But there was also a bit of optimism at play as the corn complex prepares to battle with soybeans for acreage in 2021. Strong exports and increased potential for ethanol recovery also supported the day’s gains.

Overseas corn prices also strengthened today as prospects about the South American corn crop remain less clear to market participants. A weak corn harvest in Ukraine this fall also contributed to tightening supplies in the European country, sending corn export prices up $0.05 – $0.13/bushel over the past few days.

Ukrainian corn export prices traded between $5.46 – $5.64/bushel today, according to Ukrainian agricultural consultancy APK – Inform. Ukrainian grain exports accounted for 16% of global grain flows in the 2019/20 marketing year. 2020/21 Ukrainian grain exports are expected to fall by over 26% from a year ago to 22.3 million metric tonnes.

Traders finalizing end of year positions has lent some strength to corn prices, but Advance Trading’s Toni Dunker points out there is more at play in the corn market than meets the eye. A new record high inventory of 12.04 million head in the December Cattle on Feed report indicated that domestic demand can compete for price share as much as exports.

Cattle placements have been low, but feeders are bulking up diet rations at record levels in anticipation of a vaccine-driven economic recovery. In the latest Ag Marketing IQ column, Dunker observes that pig stocks are also high for the time of year, adding another layer of price support to corn futures.

Soybeans: Falling soybean prices in early morning trade created buying opportunities throughout today’s trading session – and the few traders who are not out on vacation right now took full advantage of their chances. Traders ignored optimism for an end to Argentine dock workers’ strikes today, helping to turn this morning’s losses into the afternoon’s gains.

In fact, January soybean futures rose $0.4325/bushel to $12.985 on tight carryout concerns, especially as global usage rates remain high.

Markets continue to await news of a cessation of the Argentine dock workers’ strike. The Rosario Grains Exchange reported earlier today that nearly $1.5 billion in grains shipments have piled up at ports after the strike began on December 9. At least 162 ships carrying grain cargoes have been delayed from leaving Argentine export terminals in that time period.

Negotiations between the unions representing the workers and export company representatives will continue through today, though increased wage proposals and a pandemic bonus for workers offer some optimism that the strike’s end is within sight.

 Wheat: Wheat futures powered upwards due in large part to strong prices in the corn and soybean complexes today. A weakening dollar also significantly helped boost prices in the wheat complex, as the ICE Dollar Index fell 0.40% to $89.915 – matching last week’s two-and-a-half-year lows.

The Ukrainian winter wheat crop is faring far better than Russia’s crop so far this season. Over 90% of winter grain crops are in good condition, leading analysts to predict a strong yield for Ukraine’s wheat crop in 2021. Ukraine planted nearly 15.1 million acres of winter wheat this fall for harvest in summer 2021.

The soy complex has not been the only commodity group impacted by Argentina’s oilseed workers and grains inspectors strike. Brazilian industry group Abitrigo reports that slow wheat imports from Argentina – Brazil’s main source for wheat – will likely impact flour milling production in Brazil in the near future. Abitrigo cites 10 Argentine ships have not been loaded with wheat for Brazil during the strike.

The Argentine dockworkers strike could end as early as today, after grain processors offered protesting workers a wage increase and a pandemic bonus amid high inflation. Dockworkers’ unions will decide today if the newly proposed terms meet their satisfaction.

Weather: Snow from yesterday’s winter storm system in the Central Rockies will stretch from the Northern Plains to Northern Illinois and Indiana today, according to NOAA’s short-range forecasts. Rain will cover the U.S. from the Central Plains and Mississippi River Valley south to the Gulf, bringing much needed moisture to the hard red winter wheat crop in the Plains.

The system will largely turn to rain by tomorrow as it into the Eastern Corn Belt. The cross-country storm will likely leave about 1-3 inches of snow in the Northern Plains, between 8-12 inches of snow between Eastern Nebraska and the Chicago/Milwaukee area, and about 1-2 inches of rain in the Southern Plains between yesterday and Wednesday.

Financials: Coronavirus cases in the U.S. rose to by 174,012 from yesterday morning to 19,310,599 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 1,827 lives to 334,967 deaths as of this morning.

2020 was – for many reasons – a memorable year. As the year comes to a close, we are taking a look back at some of our favorite 2020 podcast stories which feature a COVID story from rural America, a family-focused business from the farm, and a profile of Orion Samuelson as our legend enters retirement.

With the year coming to a close, Water Street Solutions’ Darren Frye recommends looking to the challenges of 2020 to be building blocks for success in 2021. In the latest Finance First column, Frye advises farmers to look beyond the bottom line to reflect on education opportunities – both personal and professional – and marketing successes and challenges to prepare for a better 2021.

Traders took the tops off record-setting U.S. stock index gains today after early morning sessions notched new record-highs. Losses were minor, and likely capped by strong October housing data, which showed an increase in home price growth in October 2020. Home sales reached a 14-year high during the month as the quarantine lifestyle drives up real estate values.

Thin trading volumes also exacerbating the day’s profit-taking. But strong performance in the Asian stock markets thanks to vaccine disbursal helped minimize losses. The S&P 500 index shed 0.05% to $3,733.49 on the overarching sentiments.

FarmProgress

Tags: corn, soybeans, market news, afternoon recap