Corn and soybeans settle higher

Bean gains slip slightly at the close

DES MOINES, Iowa -- At the close of CME Group trading Friday, corn and soybean futures closed higher.

July corn futures finished 1½¢ higher at $3.32½; December corn ended 2½¢ higher at $3.45¼.
 
July soybean futures finished 3½¢ higher at $8.76½; November soybean futures are 4¾¢ higher at $8.80¾.

July wheat futures settled 2¼¢ lower at $4.81¼.

July soy meal futures ended $1.80 per short ton lower at $287. July soy oil futures are 0.39¢ higher at 28.45¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.83 per barrel higher at $39.67 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials have given up more than 300 points of gains and are 243 points lower.

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DES MOINES, Iowa -- At mid-session Friday, corn and soybean futures are trading higher with soybeans leading.

During late morning trading July corn futures are 1¼¢ higher at $3.32¼; December corn futures are 1¢ higher at $3.43¾.
 
July soybean futures are 4¼¢ higher at $8.77¼; November soybean futures are 5¢ higher at $8.81.

July wheat futures are 2¢ lower at $4.81½.

July soy meal futures are $1.30 per short ton lower at $287.50. July soy oil futures are 0.38¢ higher at 28.44¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.00 per barrel higher at $39.84 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 119 points higher.

 “It is quiet with little farm selling yet and specs are doing some buying,” says Jack Scoville of the PRICE Futures Group. “Beans are the leader on news that China told the U.S. once again that it will ramp up buying to comply with the Phase 1 trade agreement.  Wheat is lower as the harvest moves north. Corn is in between and boring.”

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DES MOINES, Iowa -- On Friday, the CME Group’s corn and soybean futures are higher, with beans posting stronger gains.

In early trading, July corn futures are 1¢ higher at $3.32; December corn futures are 1¼¢ higher at $3.43.
 
July soybean futures are 4½¢ higher at $8.77½; November soybean futures are 5½¢ higher at $8.81½.

July wheat futures are 1¢ lower at $4.82½.

July soy meal futures are $1.10 per short ton higher at $289.90. July soy oil futures are 0.61¢ lower at 28.67¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.34 per barrel higher at $40.18 per barrel and the U.S. dollar is lower. The Dow Jones Industrials are 330 points higher.

Al Kluis of Kluis Commodity Advisors says he’ll be watching this afternoon’s Commitments of Traders report. Will it “show any major change to the large short position in corn? Did the funds reduce positions in their near-record short position in spring wheat?”

A chart of December corn futures shows those prices are testing moving average support, he says.

“With the great start to the planting season this spring (combined with the Crop Progress reports posting strong good-to-excellent ratings), we should expect prices to remain within reach of these major moving averages,” Kluis says. “Weather could change the playing field for the funds who hold a massive (although not record) short position. Can the bulls find enough positive news to keep the market from falling through the prior two-week low?”

“We are in the key time frame that traders watch every year,” he says. “The third week of June has a historical tendency to be extreme, or to mark a change in trend.”

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DES MOINES, Iowa -- DES MOINES, Iowa -- At midsession Thursday, corn futures are trading up in a narrow range with soybeans moderately higher.

During late-morning trading, July corn futures are ¾¢ higher at $3.31; December corn futures are ¼¢ lower at $3.43.
 
July soybean futures are 3¼¢ higher at $8.75½; November soybean futures are 1½¢ higher at $8.78.

July wheat futures are 3¾¢ lower at $4.85.

July soy meal futures are $2.10 per short ton higher at $289.90. July soy oil futures are 0.01¢ lower at 28.09¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.75 per barrel higher at $38.71 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 69 points lower.

Here are some of the factors driving trading today, according to several weather forecasting models from Don Roose of U.S. Commodities.

  • Both the corn and soybean export sales reported by USDA this morning were generally less than the level traders expected.
  • “I think the thing that’s driving the market is lack of farmer selling,” he says. Basis has improved but the flat price remains unattractive.
  • U.S. soybeans are cheaper than Brazilian beans. The price is about 40¢/bushel less than in Brazil, but Brazil has a higher quality advantage of about 20¢/bushel. “Add those two together and we’re about 20¢ under Brazil,” he says.
  • Short positions by traders, at about 300,000 contracts, is about 20,000 short of a record.
  • “Weather is favorable for the next 10 days on almost all weather models.
  • Wheat harvest has reached central Kansas, where large yields are being reported.

Matt Tranel of the Commodity Risk Management Group adds his perspective:

“Markets continue to trade in a small trading range for grains," he says. “New-crop corn over the past two weeks ranges from $3.38 to $3.48/bu. The managed money community continues to maintain a net short position that surpassed 300,000 contracts last week. To this point weather throughout the Corn Belt hasn’t put forth enough dryness in the west to incentivize this community to trim short positions. Export sales were below expectations on corn this week. Soybeans have bumped their head against $8.80/bu many times. Should the market finally take out this resistance, a test of $9.00/bu would likely follow. Export sales this week ended within trade expectations and were supportive here this morning. Markets are keenly watching the meetings in Hawaii between the United States and China.”  

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DES MOINES, Iowa -- On Thursday, the grain futures are mixed and trading in a narrow range.

In early trading, the July corn futures are ½¢ higher at $3.30¾. Dec. corn futures are ¾¢ higher at $3.43½. 
 
July soybean futures are 1¢ higher at $8.72¼. November soybean futures are ½¢ higher at $8.77.

July wheat futures are 1¢ lower at $4.87¾. 

July soymeal futures are $0.10 per short ton higher at $287.90 per short ton. July soy oil futures are 0.05¢ lower at 28.05¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.06 per barrel higher at $37.90 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 195 points lower.

Before the opening of trading today, Al Kluis of Kluis Commodity Advisors had these expectations:

“If the weather models continue to disagree over what happens the next few weeks, that could be enough uncertainty for the funds to cover some shorts ahead of the weekend. If they hold tight, then they are most likely expecting a bearish USDA Acreage report at the end of the month.”

Separately, the USDA’s weekly Export Sales Report Thursday shows corn export sales that were below trade expectations for old crop corn. The numbers were:

  • Corn: 357,800 metric tons (mt) for 2019/20 and 114,800 mt for 2020/21. Trade expectations were for 450,000 to 850,000 mt for old crop, and 50,000 to 300,000 mt  for new crop
  • Soybeans: 538,100 mt old crop and 1,382,100 new crop vs. trade expectations of  500,000 to 1,200,000 mt old crop, and 600,000 to 1,300,000 new crop
  • Wheat 504,800 mt (2020/2021).
  • Soybean meal: 124,000 mt (old crop) and 58,000 mt (new crop).

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INDIANOLA, Iowa -- On Wednesday, the CME Group’s farm markets end mostly higher.

At the close, the July corn futures settled 1¼¢ higher at $3.30¼. Dec. corn futures finished unchanged at $3.42.
 
July soybean futures closed 4¼¢ higher at $8.71¼. November soybean futures closed 3½¢ higher at $8.76½.

July wheat futures ended 7¼¢ lower at $4.88¾. 

July soymeal futures closed $0.10 per short ton lower at $287.80. July soy oil futures finished 0.11¢ higher at 28.10¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.31 per barrel lower at $37.96. The U.S. dollar is higher, and the Dow Jones Industrials are 10 points higher.

Al Kluis, Kluis Advisors, says investors are watching the weather models change. 

“Traders need further export sales announcements to keep the soybean rally alive,” Kluis told customers in a daily note. “The funds are holding a very large short position in corn and a near-record short position in spring wheat. Further deterioration in crop ratings should make the shorts more nervous next week, especially if the weather pattern continues to be hot and dry.”

Kluis added, “The weather models are not matching up. One suggests more normal temperatures and rain for the remainder of June, while another is suggesting a heat and dry pattern setting up across the Corn Belt. When the models update, we could see larger intraday swings than normal.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets turn mixed.

At the close, July corn futures finished ¼¢ lower at $3.29; December corn futures ended ½¢ higher at $3.34.
 
July soybean futures closed 2¢ lower at $8.67; November soybean futures ended 3¢ lower at $8.73.

July wheat futures closed 8¾¢ lower at $4.96. 

July soy meal futures settled 50¢ per short ton lower at $287.90. July soy oil futures closed 0.25¢ higher at 27.99¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.26 per barrel higher at $38.38. The U.S. dollar is higher, and the Dow Jones Industrials are 623 points higher.

Jack Scoville, PRICE Futures Group, says the corn market has the most support.  

“The surprise was the drop in the condition ratings for corn, but the market was only able to challenge recent highs and then backed off. Pretty disappointing for the bulls. Wheat down hard on the harvest and a lack of business. The soybean markets is down a bit, too, I think mostly on the weaker Brazilian real. Overall, the market is pretty underwhelming,” Scoville says.

Al Kluis, Kluis Advisors, says investors see yesterday’s crop ratings as market-friendly. 

“The USDA Crop Progress Report showed conditions lower than expected,” Kluis told customers in a daily note. “The USDA Crop Progress Report will show lower conditions again next week as the heat takes a toll on crops across the U.S. The ratings last week may be the highest for the year.”

Kluis added, “Watch the stock market. Another higher day of trade will signal an important short-term low. This should also be positive for the meat and grain markets.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets dip.

At the close, July corn futures finished ¾¢ lower at $3.29¼; December corn futures finished 1½¢ lower at $3.41¾.
 
July soybean futures closed 2¼¢ lower at $8.69;. November soybean futures finished 3¾¢ lower at $8.76.

July wheat futures ended 2¾¢ higher at $5.04¾. 

July soy meal futures closed 60¢ per short ton lower at $288.40. July soy oil futures ended 0.24¢ higher at 27.74¢ per pound.

In the outside markets, the NYMEX crude oil market is 82¢ per barrel higher at $34.89. The U.S. dollar is lower, and the Dow Jones Industrials are 207 points higher.

Private exporters reported to the USDA export sales of 390,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year. 

The marketing year for soybeans began September 1.

The USDA Crop Progress Report today will show corn conditions up another 1% to 2% at 76% to 78% good to excellent, and the soybean ratings will also increase. Based on the current weather forecasts, this week’s crop ratings may prove to be the highest of the year, according to Kluis Advisors.

Al Kluis, Kluis Advisors, says investors will eye today’s stock market.  

“Watch the stock market today. If the major indexes close below last week’s low, then it sets up a test of the April lows. If the stock market moves sharply lower, then it will keep pressure on the energy and grain markets,” Kluis told customers in a daily note. 

Kluis added, “WxRisk.com is reporting that the Midwest forecast over the next five days is pretty dry with two days of extreme heat. By day four or five, a rain starts in the western Corn Belt. In the six- to 10-day forecasts, a lot of rain moves across all of the Corn Belt. The grain markets were pressured Tuesday on improved crop ratings and private projections for record corn and soybeans yields in the U.S. this year.”

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