TFM Daily Market Summary 11-23-2021

Happy Thanksgiving from all of us at Total Farm Marketing!
Thursday, November 25: The CME and Total Farm Marketing offices are closed.
Friday, November 26: The CME closes at noon, and Total Farm Marketing offices close at 1:00.



The crude oil market staged a strong price recovery as prices reacted to the news of oil being released from the U.S. reserves. In an attempt to control energy costs, President Biden announced the U.S. will release 50 million barrels of oil from our strategic reserves onto the market. This is in conjunction with other countries doing the same in order to cool strong oil prices. The market was likely selling the rumor and bought the fact as oil prices rallied 2+% after the news. 50 million barrels is a small amount of oil, given the fact that U.S daily oil demand is 20.7 million barrels/day average. The oil released will cover approximately 2-1/2 days of usage in the United States. Global demand for energies is still strong, and the movement of oil from reserves will only be a temporary fix, if not just a psychological adjustment. Traders in the oil market will be watching other factors to determine oil demand, like the impact of rising global COVID cases. The supply will be a factor is OPEC nations decide to make any adjustments to production in the weeks ahead. For now, oil prices may be poised for some recovery, as charts have turned technically more friendly with this price move.



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CORN HIGHLIGHTS: Corn futures worked off early session lows to finish with gains on Tuesday as prices were steady to 4 cents higher. Slip-over strength from the wheat market supported the corn market. Dec gained 3-3/4 cents closing at 5.80-1/2, and March added 4 cents to 5.88-1/4.

It seems to be a broken record, but as money flowed into the wheat market corn saw some buying support, lifting the market off early session lows. With today’s close, Dec corn closed at its highest price point since July 1. With the close at the top end of the range, the door is opened for additional buying support going into Wednesday. The news front is overall quiet, so most of the strength in corn is tied to money flow in the grain. In the outside markets, a strong move higher in crude oil prices helped bring some buying strength to the commodity sector and the corn market. Weekly crop progress pegged this year’s corn harvest at 95% complete, with only the Eastern belt showing some signs of delay. With weather forecast staying overall favorable, what remains will likely see progress. Prices may have some choppiness over the next couple session as lower volume holiday trade will be a factor, followed by Dec options expiration on Friday and first notice day for Dec futures on Nov 30. Technically, the corn market is trading in a sideways range, with the 5.85 level being the target of March futures. Prices are challenging the top of the range, and could be poised for a breakout, especially if the wheat marker maintains its upward climb.

SOYBEAN HIGHLIGHTS: A pullback in soybean meal and oil today left soybeans to trade on their own merit, and with exports so behind and China quiet, there wasn’t much upside to soybeans today. However, futures settled almost where they opened with January losing 1-1/4 cents, closing at 12.73 while November lost 2-1/2 cents, closing at 12.54-1/2.

Today was a quiet for the soybean trade, with trade volume low ahead of the holiday on Thursday. USDA reported in line with expectations that the soybeans harvest is almost complete in the US, reported to be at 95%. Most of the remaining field work is in the South, and weather is expected to be friendly for those producers to hopefully wrap up in the next 1-2 weeks. Today’s crush value was lower, however still very looks strong for strong crush demand. Export sales continue to lag with no news today of any sales. To add to that bearish sentiment, soybeans will soon be available in Brazil and are at a discount to US soybeans. Add in the current stress between the United States and China, and it won’t be shocking to see China buy elsewhere if they can, especially if they can do it for a cheaper price tag. Southern Brazil and Argentina are mostly dry, which might be the bullish news for US soybeans, as La Nina is feared to created drought-like conditions later in the growing season.

WHEAT HIGHLIGHTS: Wheat was relatively quiet mid-morning, and it looked like maybe the soar in prices was going to take a day off. However, the buyers returned once again as Dec Chicago gained 10 1/4 cents, closing at 8.56 and KC wheat closed 17 cents higher at 8.78 3/4 – both contracts once again setting new highs.

The same story still gets to be the driver for wheat prices. US wheat supplies continue to be reported at lows not seen in over 14 years, and the USDA continues to estimate ending wheat supplies as the world’s top eight exporters are also at a 14-year low. Weather is the next big push, and everywhere you look regarding wheat it seems like bad news lurks. Drought in the southwestern Plains still persists and is expected to expand and worsen in the months ahead thanks to La Nina. Alternatively, La Nina strikes Australia in an opposite fashion, with an abundance of rain with no end in sight until after Friday. Quality and protein concerns are building, as what was once expected to be a possible record crop for Australia continues to get hammered, while producers struggle to get it out of the fields. USDA also lowered winter wheat crop conditions by 2% yesterday afternoon, rating US winter wheat 44% good/excellent. USDA also reported 96% of the crop is planted, there are concerns about that remaining 4% getting in the ground. States like Illinois are reporting only 75% of the crop emerged, down from the 5-year average of 90%.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.


John Heinberg

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