This Week in Commodities 7-30-21

Corn continues sideways trade

September corn futures shed 1/4 cent this week to close at 547. New crop December corn futures added 2-1/4 cents this week to close at 545-1/4. For the month of July, December futures shed 43-1/4 cents. Rains fell across South Dakota, southwest Minnesota and Iowa Friday morning. While the rains diminished as they moved south and east into Iowa, models had not called for these rains earlier in the week. The “surprise” precipitation sparked selling pressure in both corn and soybeans throughout the day on Friday. Some areas in Iowa and Nebraska that picked up rain today had not seen a measurable rainfall in over two weeks. Trade attention as we move into August will remain on weather as well as positioning ahead of the USDA’s August 12 WASDE report. This will more than likely be the USDA’s first adjustment to their 2021 national corn yield estimate. Six of the last seven August WASDE reports have brought a yield adjustment higher with the average increase being 3.7 bushels per acre.

New-crop US corn sales last week were better than expected, coming in at just over 20 million bushels, but none of the sales were to China. For the fifth week in a row, however, China cancelled 4.7 million bushels of previous old crop corn sales. Cancellations of 2.8 million bushels were also reported, these bushels were previously booked by unknown destinations. Given the now similar prices in September and December corn futures, it is likely China will cancel or roll forward much of the remaining old-crop corn purchases to the 2021-22 marketing year.


Soybeans fall Friday along with rain in western Midwest.

September soybean futures shed 1/4 cent this week to close at 1355-1/2. November soybean futures shed 2-1/2 cents this week to close at 1349-1/4. For the month of July, new crop November soybean futures lost 51 cents. This was the first monthly close lower for the November of 2021 soybean contract since May 2020 when prices closed at $8.45 per bushel. The two-week outlook is calling for above normal temperature and below normal precipitation for the western and northern Midwest. If this forecast is verified, crop conditions in these already dry areas should worsen. However, today’s rainfall across South Dakota, Minnesota and Iowa was unexpected by many within the trade and put pressure on soybean futures.

World Weather Inc reported this week that “as long as timely rain returns near the middle of August and heat does not return for an extended period, soybean production potentials should remain high outside of the drought-stricken areas in the Northwest.” Market interest will be focused on the August WASDE report and weather as the calendar flips to August next week. In six of the last seven years, the USDA has increased soybean yield estimates in their August WASDE. The seventh year, 2019, the soybean yield estimate was left unchanged.


Spring wheat tour finds 29.1 bushels per acre

CBOT September wheat futures added 19-3/4 cents this week to close at 703-3/4. September KC wheat futures added 27-1/4 cents to close at 673-1/4. September spring wheat futures added 21-1/4 this week to close at 904-3/4. The Wheat Quality Council conducted their annual tour across spring wheat country this week. The tour estimated spring wheat top-producer North Dakotas yield to be 29.1 bushels per acre. This is the lowest yield the tour has found on record going back to 1993 due to the ongoing sever drought. This figure is well below the five-year (2015-2019) average of 43.6 bushels per acre but slightly above the USDA’s latest estimate of 28 bushels per acre. While front month September spring wheat prices trended higher this week, they still remain 40 cents off of contract highs set last week.


Milk prices climb to end week

Class III milk futures held modest gains during Friday’s trade. August futures finished the week with losses of 10 cents and the month with losses of 84 cents as it shifts to the front month contract, now almost $4.00 off its high from May 12. The block/barrel average was down slightly today but up 1.875 cents on the week and 6.5 cents higher vs. its fresh 2021 low posted last week. The fact that cheese prices have bounced after hitting a new low is good start, and if the block/barrel average can continue to push up in to the $1.60’s/lb, Class III prices are likely to bottom soon.

Class IV trade was able to end the trading day higher as the underlying spot markets were able to find some light buying. The chart action remains weak with prices down for the eighth time in the last ten weeks with the August contract closing at $15.50 today, totaling losses of 32 cents for the week and 67 cents for the month. Butter prices closed up 2 cents today after pushing to an almost 5-month low this week, while powder prices were up slightly today to total a penny and a half higher on the week. Next week will entail a Dairy Exports update on Thursday, which has been one of the lone bright spots fundamentally for the market.


Keegan Madigan

Sign up to get daily TFM Market Updates straight to your email!

back to TFM Market Updates