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Wheat futures decline on favorable northern Plains weather

Rainfall is expected in parts of North Dakota starting this afternoon.

Wheat futures were lower in early trading Thursday as rain moves into the northern Plains where spring varieties are maturing, which may give the crop a boost. 

Spring wheat was rated 69% good or excellent as of Sunday, which was down from the previous week when 75% earned top ratings. 

The National Weather Service said there’s a chance of thunderstorms across much of North Dakota this afternoon and evening, though some may become severe. 

Prices also are being underpinned by weather concerns in Australia where rains are expected to be limited in the next 10 days, according to Commodity Weather Group. Moisture shortages are forecast to expand to half of the country’s Wheat Belt. 

It’s not all bad news for wheat, however, as export sales in the seven days that ended on June 25 came in at almost 490,000 metric tons. Analysts polled by Reuters were expected sales from 250,000 tonnes to 600,000 metric tons.

The U.S. Department of Agriculture on Tuesday said it expects all-wheat acres for 2020 at 44.3 million, down 2% from the previous year and the lowest total since record keeping began in 1919. 

Chicago wheat for September delivery was down 3¼¢ to $4.95½ a bushel in early trading while Kansas City futures lost 3¾¢ to $4.39 a bushel. 

Corn and soybeans were mixed early as investors weighed hot weather in the southern Corn Belt against concerns about demand amid a resurgence of the COVID-19 virus. 

Corn futures for December delivery fell 1¾¢ to $3.58¾ a bushel. Soybeans for November delivery gained 1¢ to $9 a bushel early Thursday. 

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets extend their rally from yesterday’s bullish USDA report.

At the close, the Sept. corn futures finished 9¢ higher at $3.50½. Dec. corn futures closed 10¢ higher at $3.60½.
 
Aug. soybean futures closed 12¾¢ higher at $8.91. November soybean futures settled 16¾¢ higher at $8.99.

Sep. wheat futures finished 7¢ higher at $4.98½. 

Aug. soymeal futures closed $6.40 per short ton higher at $295.50. Aug. soy oil futures closed 0.22¢ higher at 28.36¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.35 per barrel higher at $39.62. The U.S. dollar is lower, and the Dow Jones Industrials are 20 points lower.

Jack Scoville, PRICE Futures Group, says that the markets are in day two of what should be a three-day buying spree by the funds. 

“There is at least one more day to go. The reports offered something for everyone, with stocks estimates high but planted area estimates low. We are reacting to the planted area and are ignoring the stocks for now, but sooner or later those will come into play as well. So, the rally probably has a limited potential for a further rally, unless it turns hot and dusty in July. If that weather is realized, all bets are off as the market could really run. Forecasts are for warmer and drier, so the market will be on edge for the next week or two until we see how pollination and flowering will go,” Scoville says.

Al Kluis, Kluis Advisors, says that investors are all bulled up and farmers should be prepared to take advantage of the rally. 

“Grain traders were surprised by the USDA on Tuesday: corn acres fell nearly 5 million acres from the March report, while soybean acres rose just over 300,000 acres. Prereport predictions were for a decline in corn acres near 1.5 million acres and an increase in soybean acres of nearly 1 million acres. The stocks section of the report was bearish corn and friendly soybeans; however, the acreage surprise gave the bulls the momentum,” Kluis told customers in a daily note. 

Kluis added, “The friendly USDA report should give the grain bulls a chance to post higher highs on the charts. The fundamental picture is less bearish than Monday. However, the balance sheet still has the potential to be very comfortable at the end of the year. Be prepared to take advantage of the rally.”

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Tuesday’s Grain Market Review

It’s report day! 

The USDA released bullush numbers in its June Acreage Report.

To start the final session of June, the CME Group’s farm markets extend gains from yesterday, with strength in the corn and soybean markets.

At midsession, the Sept. corn futures are 11½¢ higher at $3.40¾. Dec. corn futures are 12¼¢ higher at $3.47¾.
 
Aug. soybean futures are 14¼¢ higher at $8.76¾. November soybean futures are 16¢ higher at $8.77½.

Sep. wheat futures are 5¾¢ higher at $4.92½. 

Aug. soymeal futures are $3.90 per short ton higher at $287.50. Aug. soy oil futures are 0.16¢ higher at 27.94¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.12 per barrel lower at $39.58. The U.S. dollar is lower, and the Dow Jones Industrials are 51 points higher.

Al Kluis, Kluis Advisors, says that investors will be watching today’s USDA report and the new weather forecasts, for price direction.

“The grain markets closed higher with corn gaining back all of the Thursday/Friday losses. The U.S. stock market posted an impressive rally back, and the extended weather forecasts turned hotter and drier,” Kluis told customers in a daily note. The USDA Crop Progress report showed corn and soybean ratings improved by 1% while the hard red spring wheat ratings were 6% lower.

Kluis added, “The trade has built pretty bearish expectations into the grain stocks report numbers that are out today. I think it will be important to watch the price action in corn and soybeans from noon into the 1:15 p.m. close. At this low price level, it may be hard to get a negative reaction to a bearish report.”

“Watch the extended weather forecasts for the southern and western Corn Belt. The weather models on Monday show the heat staying around for five to eight days. No 100°F. temps in the forecast yet. Instead, it is an extended heat pattern that stays between 95°F. for the high and 72°F. for the low, which may take a toll on corn yields,” Kluis stated.

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets prepare for new trading data by moving higher.

At the close, the Sept. corn futures finished 9¢ higher at $3.28¾. Dec. corn futures finished 9½¢ higher at $3.34¾.
 
Aug. soybean futures closed 1¾¢ higher at $8.61¾. November soybean futures ended ¼¢ higher at $8.61½.

Sep. wheat futures closed 10¾¢ higher at $4.86½. 

Aug. soymeal futures closed $1.70 per short ton lower at $283.60. Aug. soy oil futures finished 0.37¢ higher at 27.78¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.14 per barrel higher at $39.63. The U.S. dollar is lower, and the Dow Jones Industrials are 580 points higher.

Al Kluis, Kluis Advisors, says that investors will be watching two separate USDA reports this week for price direction.

“The spike in COVID-19 cases in the U.S. is a big concern for markets throughout the world. The pandemic is destroying consumer confidence, making many investors go to the sidelines, and reducing consumer demand,” Kluis told customers in a daily note. 

Kluis added, “The USDA Crop Progress report today will show corn and soybean conditions about steady. Some areas like southwest Iowa, Nebraska, Kansas, and Indiana are going down, while most of the central Corn Belt – especially Illinois – is improving. The current high rating suggests that the U.S. corn and soybean crops have trendline or better yield potential. Watch the projections on U.S. corn and soybean acres in tomorrow’s Acreage report. The total acres in the March Prospective Plantings report was 180.5 million acres. I think the total combined corn and soybean acres in the Tuesday report may be less than that.”

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