Soybean Market Shaves Off 12¢ Friday
DES MOINES, Iowa - On Friday, the CME Group’s farm markets fade.
At the close, the Sep. corn futures closed 3 1/2¢ lower at $3.59 3/4. Dec. corn futures closed 3 1/4¢ lower at $3.67 3/4.
Sep. soybean futures ended 12 3/4¢ lower at $8.43 1/4. Jan. soybean futures settled 12 1/4¢ lower at $8.56 1/2.
Dec. wheat futures are 6¢ higher at $4.77 3/4.
December soymeal futures closed $3.90 per short ton lower at $295.40. December soy oil futures settled $0.20 lower at 28.70¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.25 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 510 points lower.
On Friday, China announced additional tariffs on U.S. soybean, beef and pork imports. U.S. President replied by tweeting on the social network Twitter, ordering U.S. companies to find an alternative to operating in China.
Jack Scoville, PRICE Futures Group, says that it’s a double whammy for the markets today.
“China tariffs on the one side and fears that the crop tour’s final estimate might show a potentially big crop out there, despite the weather this afternoon on the other. Business is dead quiet, otherwise. Farmers are not doing much and buyers are quiet, so it looks like mostly spec,” Scoville says.
Al Kluis, Kluis Advisors, says that investors keep watching upward movements fade.
“Any sort of rally in corn or soybeans continues to be hard to hold. Corn did get some support as President Trump expects to meet with the EPA over the waivers granted to some of the refineries. Weather still looks to be a nonevent, and the crop continues to progress towards maturity,” Kluis told customers in a daily note.
Kluis added, “The Commitments of Traders report will be out at 2:30 p.m. CST today. Will the funds finally be short corn? Many analysts are predicting that the funds now hold a short position in corn.”
Thursday’s Grain Market Review
On Thursday, the CME Group’s farm markets finish mixed.
At the close, the Sep. corn futures finished ¾¢ higher at $3.63¼. Dec. corn futures closed ¾¢ higher at $3.71.
Nov. soybean futures finished 4½¢ lower at $8.68½. Jan. soybean futures settled 4½¢ lower at $8.82.
Dec. wheat futures closed 3¾¢ higher at $4.71¾.
December soymeal futures settled $1.00 per short ton lower at $299.30. December soy oil futures finished 0.22¢ lower at 28.90¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.02 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 60 points higher.
Matt Tranel, cash adviser for Commodity Risk Management Group, says that the market participants eye a low.
“The trade continues to search for a confirmed bottom in the corn market and is struggling to find it just yet, as the 2019 crop tour wraps up today. Some traders are finding value in buying the $3.70 December levels with next support just 6¢ lower from early May. Not much momentum has been generated to the top end today, as many traders want to see the final numbers released tonight from the tour,” Tranel says.
On Thursday, the USDA’s Weekly Export Sales Report shows favorable soybean figures.
- Corn = 420,900 metric tons vs. the trade’s expectations of between 250,000 and 950,000 mmt.
- Soybeans = 818,500 mt. vs. the trade’s expectations of between 150,000 and 750,000 mt.
- Wheat = 595,500 mt. the trade’s expectations of between 250,000 and 500,000 mt.
- Soybean meal = 132,000 mt. the trade’s expectations of between 100,000 and 400,000 mt.
Wednesday’s Grain Market Review
On Wednesday, the CME Group’s farm markets close slightly higher.
At the close, September corn futures finished 3¢ higher at $3.62; December corn futures finished 1½¢ higher at $3.70½.
November soybean futures settled 4¾¢ higher at $8.60½; January soybean futures closed 4¾¢ higher at $8.73.
December wheat futures closed 1¼¢ higher at $4.68.
December soy meal futures closed $0.80 per short ton lower at $300.30. December soy oil futures ended 0.33¢ higher at 29.12¢ per pound.
In the outside markets, the NYMEX crude oil market is 14¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 258 points higher.
Jason Roose, U.S. Commodities, says the corn market is well supported.
“With grains technically oversold, a short covering rally was in place, and welcomed. Maturity of our late-planted crop will limit breaks, as this week’s crop tour confirmed. Yet, the unknown demand for corn and soybeans and larger stocks will limit rallies.”
On Wednesday, private exporters reported to the USDA export sales of 328,000 metric tons of corn for delivery to Mexico during the 2019/2020 marketing year.
The marketing year for corn began September 1.
Al Kluis, Kluis Advisors, says investors ought to keep crop tours in perspective.
“The crop tour scheduled for this week is under way. Early reports suggest yields below last year and, in some cases, below the three-year average. This crop tour, and any other crop tours conducted this year, have to be taken with a grain of salt. The information gathered is from a small sample of where corn is produced across the Midwest. Some places are in better shape and other places are in worse shape. In short, we can’t expect the market to make significant moves based on these findings,” Kluis told customers in a daily note.
Kluis added, “The volatility levels for corn are down significantly from the highs in June and July. Will volatility continue to fall if prices grind lower? Or, will they enter a sideways trading channel? Watch for a move lower in prices and a corresponding jump in volatility. This action could indicate a low is being placed.”
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s farm markets close mostly lower.
At the close, September corn futures closed 5½¢ lower at $3.59¾; December corn futures closed 5¾¢ lower at $3.68¾.
November soybean futures finished 1¾¢ higher at $8.55¾; January soybean futures ended 1¾¢ higher at $8.68¼.
December wheat futures settled 6¢ lower at $4.66½.
December soy meal futures ended $2.30 per short ton higher at $299.50. December soy oil futures settled 0.25¢ lower at 28.79¢ per pound.
In the outside markets, the NYMEX crude oil market is 15¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 103 points lower.
Dustin Johnson, AgYield senior strategist, says today’s mostly lower markets are a result of rain events.
“Favorable rains through Iowa and Illinois, again overnight, likely spurred early corn and soybean selling from overnight strength. Crop tour results are showing a large drop in soybean pod counts in first day of tour; whereas, corn yields are down but in line with USDA on a percentage basis,” Johnson says.
Al Kluis, Kluis Advisors, says investors are mixed on the markets.
“Weekend rain in the dry areas of the central Corn Belt and improved weather forecast put pressure on the grain markets on Monday. Corn futures closed 6¢ lower, soybean futures closed 13¢ lower, wheat futures closed 2¢ to 5¢ lower. The USDA Crop Progress Report showed corn and soybean ratings dropping by 1%, which is positive for prices in the overnight markets,” Kluis told customers in a daily note.
Kluis added, “What is next for the bull spreads in the corn market? Right before the bull market first started in May, the bull spreads started to pull in. Then – as prices approached the high in the third week of June – the bull spreads collapsed, signaling a top. The spreads were flat on Monday. However, long term, when the bull spreads start working, it will signal that corn prices are turning higher.”
Monday’s Grain Market Review
On Monday, the CME Group’s farm markets lose traction.
At the close, September corn futures finished 6¢ lower at $3.65; December corn futures settled 6¼¢ lower at $3.74½.
November soybean futures closed 13½¢ lower at $8.66¼; January soybean futures ended 13¢ lower at $8.80½.
December wheat futures closed 5¢ lower at $4.72½.
December soy meal futures closed $3.10 per short ton lower at $297.20. December soy oil futures are 0.47¢ lower at 29.04¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.19 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 275 points higher.
Matt Tranel, cash adviser for Commodity Risk Management Group, says the favorable weather pressures the farm markets.
“Looks like the expression of ‘rain makes grain’ has this corn market moving lower once again to begin the week. Rainfall covered a widespread region of the Corn Belt over the weekend, with precipitation exceeding what many had forecast. Plus, there appears to be more rain on the way for this week, and cooler temperatures, which would benefit further crop progress.”
Tranel added, “The funds are continuing to pressure this market from the results of the latest WASDE Report last week. That will weigh on the market for a while. This week is all about crop tour. The trade will be paying very close attention to every state’s yield estimates, especially out of the eastern Corn Belt. If results confirm USDA estimates, expect more downside. If the crop tour’s numbers are lower than the USDA then we may get a pop. But $4-per-bushel December futures will be a tough nut to crack, with the info that we have to trade today.”
Al Kluis, Kluis Advisors, says investors are waiting for the next shoe to drop.
“The grain markets closed higher on Friday. The grain markets were very oversold and bounced back on Friday but closed lower for the week. The lows last week in the corn markets are likely to be the seasonal lows. In the last few years (2016 to 2018), the corn market has bottomed ahead of harvest. I do not look for a V-type of bottom, but rather the start of basing type market action,” Kluis told customers in a daily note.
Kluis added, “How much rain will hit early this week in the central and eastern Corn Belt? And where? That area remains dry, and the only chance of rain over the next two weeks is early this week. We expect steady conditions in today’s USDA Crop Progress Report.”