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Wheat, soybean and corn prices climb Friday

A fresh batch of U.S. corn was sold Friday, according to the USDA.

On Friday, the CME Group's farm markets look to the wheat, soybean markets for higher movement.

At the close, the Dec. corn futures closed 3¢ higher at $4.19 1/2. March corn futures settled 2¢ higher at $4.20 1/2. 

Nov. soybean futures closed 10¢ higher at $10.83 3/4. January soybean futures closed 8 3/4¢ higher at $10.81 1/4.

Dec. wheat futures closed 10¢ higher at $6.32 3/4. 

Dec. soymeal futures settled $4.00 per short ton higher at $386.40. Dec. soy oil futures closed 0.42 cent higher at 34.11¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.89 per barrel lower (2.19%) at $39.75. The U.S. dollar is lower, and the Dow Jones Industrials are 28 points (0.10%) lower at 28,335 points.

Private exporters reported to the USDA export sales of 100,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Bob Linneman, Kluis Advisors, says that the showdown between the farmers that have the grain and the endusers that need it is on. 

"Corn is now trading in the key resistance zone between $4.10 and $4.20. Based on the strong basis levels in many areas, grain is moving to town slowly. Farmers are holding--or intending to hold--as many bushels as they possibly can. Those commercial grain companies that have contracted export business to China will have to find a way to get those bushels out of the famers' hands soon, or they will run the risk of having to scramble when those trains need to head to the ports," Linneman told customers in a daily note.    

He added, "As the election nears, all markets are subject to increased volatility. It would be quite impressive for the grains to remain steadfast in their trend if the outside markets see a significant pullback."

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Thursday's Grain Market Revie

On Thursday, following a weak start, the CME Group’s farm markets close slightly higher.

At the close, the Dec. corn futures closed 2½¢ higher at $4.16½. March corn futures settled 1¼¢ higher at $4.18½. 

Nov. soybean futures settled 1¾¢ higher at $10.73¾. January soybean futures closed ¾¢ higher at $10.72¼.

Dec. wheat futures closed 4¢ lower at $6.25¾. 

Dec. soymeal futures finished $3.60 per short ton higher at $382.40. Dec. soy oil futures closed 0.49¢ higher at 33.69¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.63 per barrel higher (0.63%) at $40.66. The U.S. dollar is higher, and the Dow Jones Industrials are 181 points (0.64%) lower at 28,392 points.

On Thursday, private exporters reported to the USDA the following activity:

  • Export sales of 152,404 metric tons of soybeans for delivery to Mexico during the 2020/2021 marketing year.
  • Export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 130,000 metric tons of white wheat for delivery to South Korea during the 2020/2021 marketing year. 

The marketing year for wheat began June 1; soybeans began Sept. 1.

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures.

  • Corn = 1.83 million metric tons vs. the trade’s expectations of between 800,000 mmt and 1.4 mmt. 
  • Soybeans = 2.22 million metric tons. vs. trade’s expectations of 1.5 mmt to 2.5 mmt. Of that total, China bought 1.59 million metric tons.
  • Wheat = 367,500 mt. 
  • Soybean meal = 321,900 mt.

Bob Linneman, Kluis Advisors, says that corn futures have rallied to a new high and are now in a critical area on the charts.

“The $4.10 to $4.20 range has been the window for the top over the past few years, whenever futures managed to get that high. It is worth noting that the timing of those prior highs was during the summer rally, not during harvest like we are currently experiencing. Soybean futures came within a few pennies of a new high on Wednesday, as rumors of another five to six cargos were sold to China,” Linneman told customers in a daily note.    

He added, “As long as the bull spreads in the corn and soybean markets remain strong, this bull rally will stay intact. If the spreads roll over, then that will be the warning flag for a larger correction lower.”

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Wednesday’s Grain Market Review

On Wednesday, investors closed the CME Group’s farm markets higher.

At the close, the Dec. corn futures finished 5¢ higher at $4.13. March corn futures finished 3½¢ higher at $4.16. 

Nov. soybean futures closed 8¢ higher at $10.72. January soybean futures ended 7¼¢ higher at $10.71.

Dec. wheat futures closed 2¼¢ lower at $6.29¾. 

Dec. soymeal futures settled $6.90 per short ton higher at $378.80. Dec. soy oil futures closed 0.11 cent lower at 33.20¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.65 per barrel lower (3.91%) at $40.05. The U.S. dollar is lower, and the Dow Jones Industrials are 10 points (0.04%) lower.

Al Kluis, Kluis Advisors, says that investors should be watching the price difference between the November 2020 soybean contract and the January 2021 contract.

“Dry weather concerns in the U.S. southern Plains and Russia are driving world wheat prices higher,” Kluis told customers in a daily note.    

He added, “Watch the spread between November 2020 and January 2021 soybeans. In late September, the January contract closed 7¢ over the November contract. Now the spread is at even money. It is unusual that cash soybean bids moved out to the January 2021 contract in mid-October. It appears that grain companies do not want to be caught short the November contract for the cash soybeans they are buying.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets add to the week’s gains.

At the close, the Dec. corn futures finished 3½¢ higher at $4.08¾. March corn futures closed 2¾¢ higher at $4.13. 

Nov. soybean futures closed 9½¢ higher at $10.63¾. January soybean futures ended 9¾¢ higher at $10.63¾.

Dec. wheat futures settled 5¢ higher at $6.32. 

Dec. soymeal futures closed $1.30 per short ton lower at $371.90. Dec. soy oil futures closed 0.78¢ higher at 33.31¢ per pound. In the outside markets, the NYMEX crude oil market is $0.68 per barrel higher (1.67%) at $41.51. The U.S. dollar is lower, and the Dow Jones Industrials are 264 points (0.63%) higher.

On Tuesday, private exporters reported to the USDA export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Jason Roose, U.S. Commodities, says that there is plenty of market support to go around.

“Grains continue to find support with light producer selling and strong export demand. Plus, the weak U.S. dollar continues to weaken, which is attractive to foreign buyers. Slow planting progress in Brazil and potential import tax has made early sellers nervous. For these reasons, exports will be closely watched the next few weeks if trend continues,” Roose says.

Al Kluis, Kluis Advisors, says there is good reason to believe the markets can go higher.

“As long as the prices of corn and soybeans continue higher in China, U.S. prices will be well supported on any setback. Corn futures on the Dalian Commodity exchange in China are trading at $9.60 this morning and soybean prices at $19.82. Even if you figure a $1.50-per-bushel freight cost, U.S. prices are still quite low for Chinese end users,” Kluis told customers in a daily note.    

He added, “A lot of corn exports were announced again on Monday, and grain prices in China were sharply higher. The USDA weekly crop report showed corn harvest at 60% complete and soybean harvest at 75%.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close stronger.

At the close, the Dec. corn futures finished 3¼¢ higher at $4.05½. March corn futures closed 3½¢ higher at $4.10¼. 

Nov. soybean futures closed 4¼¢ higher at $10.54½. January soybean futures finished 3¾¢ higher at $10.54.

Dec. wheat futures settled 1¾¢ higher at $6.27. 

Dec. soymeal futures closed $5.70 per short ton higher at $373.20. Dec. soy oil futures finished 0.46¢ lower at 32.53¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.02 per barrel higher (0.05%) at $40.90. The U.S. dollar is lower, and the Dow Jones Industrials are 202 points (0.71%) lower.

On Monday, private exporters reported to the USDA:

  • Export sales of 345,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 123,000 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Jack Scoville, PRICE Futures Group, says that the strong overnight did not carryover to the daytime trading.

“Wheat was higher but found some spec selling on forecasts for a narrow line of rain to form in Russia and some forecasts for sporadic rains in the Great Plains. None of this will help, but the market is higher and susceptible to this.  Beans and corn are off the day’s highs, as soybean planting gets cranking in Brazil and U.S. corn had announcements on the daily export sales monitor. The COT report showed spec selling into commercial buying. This is unusual, given the recent rally and shows how big the demand has been,” Scoville says.

Al Kluis, Kluis Advisors, says that the markets are setting up an acreage battle for 2021.

“The USDA Crop Progress report today will show corn harvest at about 60% complete and soybean harvest at 78%. The crop is getting put away really fast and a lot of fall tillage is done. This sets up more corn and soybean acreage and less prevent plant in 2021. The acreage war will intensify next spring,” Kluis told customers in a daily note.    

He added, “Will China step in and continue to buy large amounts of corn and soybeans this week? With harvest over 50% for both corn and soybeans, I expect both export buyers and U.S. end users to again be active buyers in the cash and futures markets. With corn trading at $9.60 a bushel, soybeans at over $18 a bushel in China, and the U.S. dollar at 93%, our prices are a good value to the Chinese importers.”

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