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Ag Markets Reverse Lower Friday

The U.S. dollar is lower again Friday.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets drop.

At the close, the Dec. corn futures finished 3 1/4¢ lower at $3.54 1/4. March corn futures ended 3¢ lower at $3.68 3/4.
 
Nov. soybean futures settled 3 3/4¢ lower at $8.57 3/4. Jan. soybean futures ended 3 1/2¢ lower at $8.72.

Dec. wheat futures closed 2 1/2¢ lower at $4.63 1/4.

December soymeal futures finished $1.50 per short ton lower at $293.00. December soy oil futures closed $0.01 higher at 28.65¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.34 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 83 points higher.

On Friday, the delayed USDA’s Weekly Export Sales Report shows strong soybean figures.

  • Corn = 582,600 metric tons vs. the trade’s expectations of between 600,000 and 950,000 mmt.
  • Soybeans = 857,800 mt. vs. the trade’s expectations of between 50,000 and 700,000 mt.
  • Wheat = 312,100 mt. the trade’s expectations of between 400,000 and 900,000 mt.
  • Soybean meal = 227,100 mt. the trade’s expectations of between 150,000 and 325,000 mt.

Jack Scoville, PRICE Futures Group, says that investors are watching  yield estimates move the market.

“We are reacting to private analyst firms, FC Stone and Informa Economic’s production estimates.  They are high,” Scoville says.
 
Informa is using a 169.6 bushels per acre estimate for U.S. corn and a crop size estimate of 13.906 billion bushels (USDA at 169.5 bpa, 13.901).
 
For soybeans, Informa pegged U.S. soybean yield at 48.4 bpa, while its crop size is estimated at 3.671 bil (USDA 48.5 bpa, 3.680 bil).
 
“I am hearing very good to possibly record yields in Texas corn and ideas that Delta corn is good, but I have not heard yield comments for the Delta.  Corn in the Carolinas, irrigated maybe about 200 bpa, unirrigated/dryland anywhere from 20 to 50 bpa due to a very hot and dry June,” Scoville says.

Al Kluis, Kluis Advisors, says the farm markets remain choppy, as investors await next week’s USDA Supply/Demand Report.

“The back-and-forth action in U.S. grain continues. One day corn is down hard, and then it’s soybeans. The weather looks good for the soybean crop to get bigger, so the funds added to their short position on Thursday. With the grain being under pressure the last several weeks, we could see a small short-covering rally next week leading into the September USDA Crop Production Report,” Kluis told customers in a daily note.

Kluis added, “The USDA will more than likely give us a somewhat negative Crop Production Report next week. It is going to be real tough to gauge the size of this year’s crop given how immature the crop is as of this time of the year. The USDA will likely err by stating a bigger yield number than we could see in the final January number.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets embrace a choppy trading pattern.

At the close, December corn futures finished ¼¢ higher at $3.58½; March corn futures closed steady at $3.71¾.
 
November soybean futures closed 14¢ lower at $8.61½; January soybean futures settled 13½¢ lower at $8.75¼.

December wheat futures finished 5½¢ higher at $4.66¾.

December soy meal futures closed $4.00 per short ton lower at $294.50. December soy oil futures ended 0.35¢ lower at 28.64¢ per pound.

In the outside markets, the NYMEX crude oil market is 8¢ per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 386 points higher.

Al Kluis, Kluis Advisors, says investors are being fed plenty of bearish news.

“The weather forecasts are nonthreatening. Of course, this could change, but the funds are looking at a nonthreatening forecast and a poor export situation. There are not many reasons for them to be concerned,” Kluis told customers in a daily note.

Kluis added, “Soybeans managed to close above the 20-day average with a strong response to larger-than-expected soybean purchases by Mexico. This is only the third time we have seen November soybeans close over this moving average since July 1. The next target for the bulls is $8.82, which is the prior two-week high. It was announced overnight that U.S. and China will meet in October to discuss trade. This is encouraging, but will it be just more of the same.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets see little momentum.

At the close, December corn futures finished 2½¢ lower at $3.58½; March corn futures finished 2½¢ lower at $3.71¾.
 
November soybean futures closed 7¢ higher at $8.75¼; January soybean futures settled 7¢ higher at $8.89¼.

December wheat futures settled 7¼¢ higher at $4.60¾.

December soy meal futures closed $4.40 per short ton higher at $298.50. December soy oil futures settled 0.10¢ lower at 28.99¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.33 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 225 points higher.

On Wednesday, private exporters reported to the USDA export sales of 451,766 metric tons of soybeans for delivery to Mexico during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Jason Roose, U.S. Commodities, says the grains are trading both sides of unchanged today, in oversold territory.

“An early harvest, the stronger dollar, and an unresolved trade with China continue to pressure corn near contract lows. Support will continue to be with the maturity of the late planted crops as the September USDA Crop Progress Report nears,” Roose says.

Al Kluis, Kluis Advisors, says investors will now start to watch South America’s planting season weather.

“Soybeans managed to close nearly steady yesterday as traders weigh the idea of lower production in the U.S. If South America does not get off to a good start to its growing season, then how might that impact the world balance sheet?” Kluis asked customers in a daily note.

Kluis added, “The USDA Crop Progress Reports may not be telling the full story. We are getting reports from clients that there is big variability within individual fields. We need to get reports from the combines before these conditions will be fully understood by traders. November soybeans are within a dime of the prior two-week high. A close over $8.82 would signal a change in trend is under way. Before this can happen, we need a strong close over the 20-day.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets close lower, with better weather and expected improved crop conditions.

At the close, December corn futures finished 8¾¢ lower at $3.61; March corn futures are 8¢ lower at $3.74¼.
 
November soybean futures closed ½¢ lower at $8.68¼; January soybean futures ended ¼¢ higher at $8.82½.

December wheat futures closed 9¢ lower at $4.53.

December soy meal futures finished $1.20 per short ton lower at $294.10. December soy oil futures closed 0.28¢ higher at 29.09¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.21 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 350 points lower.

Dustin Johnson, AgYield senior strategist, says investors are looking for some bullishness to trade.

“On Tuesday, USDA released weekly corn export inspections that were very low; whereas, soybeans were surprisingly strong. Also, the two-week forecast is showing above-average temps, which will help some of the late-maturity corn finish out. With the strong dollar and poor exports, the market is targeting corn/wheat and has pushed December 19 corn to a new contract low. The failed double bottom and failed post-first notice day strength may have also had some short-term bottom pickers selling on stops into the new low print,” Johnson says.

Al Kluis, Kluis Advisors, says investors will now start to watch South America’s planting season weather.

“Welcome to September! Grain prices ended last week on a quiet note. The weekly charts posted a small gain for corn and nearly a 13¢ gain for soybeans. The problem for the bulls is that both corn and soybeans posted lower lows and lower highs on the weekly charts. We need to see this trend reverse to feel comfortable saying prices are poised for a rebound rally,” Kluis told customers in a daily note.

Kluis added, “South American farmers are gearing up to begin planting soon if the weather allows. The weather models will be watched closely over the next few weeks to ensure the South American season gets off to a good start. China is likely holding its breath hoping the growing season is ideal.”

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