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All Eyes Are on Today’s USDA Reports

Investors have new demand news and updated USDA estimates to digest.

DES MOINES, Iowa -- On Friday, the USDA will release its Quarterly Grain Stocks Report and its Prospective Planting Intentions estimates.

In early trading, the May futures are ¾¢ lower at $3.73. July futures are 1¢ lower at $3.82.
 
May soybean futures are 2½¢ higher at $8.92. July soybean futures are 2½¢ higher at $9.05½.

May wheat futures are 3¼¢ lower at $4.61.

May soymeal futures are $1.30 per short ton higher at $307.80. May soy oil futures are 0.03¢ lower at 28.60¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.88 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 105 points higher.

On Friday, private exporters reported to the U.S. Department of Agriculture the following activity:

  • Export sales of 816,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year.
  • Export sales of 150,000 metric tons of hard red winter wheat for delivery to Iraq during the 2018/2019 marketing year.

The marketing year for wheat began June 1 and soybeans began September 1.

Al Kluis, Kluis Advisors, says that investors are preparing for today’s USDA Reports.

“Even if we get a surprise and get a bullish report in corn and soybeans, the funds will be there to defend their large short positions. Watch the trade action after the report today, and more importantly where the corn and soybean prices close. Often during the release of these big crop reports we get a big trading range,” Kluis told customers in a daily note.

He added, “Thursday was a pretty typical day for U.S. grain prices leading up into a major crop report. Low volume and a tight range of trade have the traders patiently awaiting the USDA numbers. Weekly export sales on Thursday showed a nice uptick in corn but disappointing for the soybean complex.”

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Thursday’s Grain Markets Review

On Thursday, the CME Group’s farm markets face demand issues.

At the close, the May futures finished ¼¢ higher at $3.74. July futures ended ½¢ higher at $3.83¾.
 
May soybean futures closed 2¢ higher at $8.89½. July soybean futures closed 2¢ higher at $9.03.

May wheat futures ended 5¢ lower at $4.64½.

May soymeal futures closed $2.10 per short ton higher at $306.50. May soy oil futures closed 0.19¢ lower at 28.63¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.15 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 51 points higher.

Private exporters reported to the U.S. Department of Agriculture the following activity:

• Export sales of 120,000 metric tons of soft red winter wheat for delivery to Egypt during the 2018/2019 marketing year.

• Export sales of 150,000 metric tons of hard red winter wheat for delivery to Iraq. Of the total, 50,000 metric tons are for delivery during the 2018/2019 marketing year and 100,000 metric tons are for delivery during the 2019/2020 marketing year.

The marketing year for wheat began June 1.

Al Kluis, Kluis Advisors, says that investors are positioning themselves ahead of the Friday data.

“Trump administration comments about not lifting any tariffs in the near future got the market to start off on a negative tone. Traders seem to be already pricing in negative results from the USDA reports (Prospective Plantings and Grain Stocks) that will be released Friday. Expect two-sided trade today: The market will get positioned ahead of the report on Friday, and also keep an eye on the weekly export sales,” Kluis told customers in a daily note.

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Wednesday’s Grain Market Review

On Wednesday, the investors remain squarely focused on an expected neutral to bearish USDA report Friday.

At the close, the May futures finished 3½¢ lower at $3.73¾. July futures ended 3½¢ lower at $3.83½.
 
May soybean futures closed 13¼¢ lower at $8.87½. July soybean futures closed 13¼¢ lower at $9.01.

May wheat futures finished ¼¢ higher at $4.69½.

May soymeal futures settled 6.60 per short ton lower at $304.40. May soy oil futures finished 0.17¢ higher at 28.82¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.59 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 52 points lower.

Jack Scoville, PRICE Futures Group, says that investors are selling, before the Friday USDA Report comes out.

“But soybeans also are dealing with a sharply lower Brazilian real currency and corn with the weak ethanol data. The real’s weakness could create some producer selling, but so far I am not seeing it. There is no news from China on a U.S. trade deal. And China says an agreement might take until May to get done. But progress still expected and maybe the outline of the agreement can become known soon,” Scoville says.  

Scoville added, “Demand does not seem to be real strong. Some reports of cash moving here in the U.S. yesterday and early today, but not much talk that way since the market moved down.”

Al Kluis, Kluis Advisors, says that soybean prices continue to find strong resistance at the 20-day average.

“Prices are unlikely to have a major move as traders await the USDA report on Friday. There was a late-afternoon headline that suggested China bought five cargos of soybeans from Brazil. This news is unlikely to sway the market much; this is the time of year that China starts buying South American soybeans,” Kluis told customers in a daily note.

He added, “Ground conditions in areas that are being impacted by floodwaters will be difficult for traders to quantify and analyze. The first round of indications will come when we get planting progress updates in early April.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s wheat market fails to pull up corn and beans.

At the close, the May futures finished 2¼¢ lower at $3.77¼. July futures ended 2¼¢ lower at $3.87.
 
May soybean futures settled 5¾¢ lower at $9.00¾. July soybean futures finished 5¾¢ lower at $9.14¾.

May wheat futures closed ¼¢ lower at $4.69½.

May soymeal futures settled $4.10 per short ton lower at $311.00. May soy oil futures closed 0.17¢ lower at 28.65¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.06 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 80 points higher.

Britt O’Connell, cash advisor for Commodity Risk Management Group, says that the farm markets remain without support.  

“Grains are lower across the board this midsession and trading in a very narrow range. We would expect this to continue for the balance of the week as traders position ahead of Friday’s USDA planting intentions and WASDE report. Other than that, it is a very quiet day by way of news in the trade,” O’Connell says.

Al Kluis, Kluis Advisors, says that investors are watching the corn market for trend direction.

“Will the bull spreads continue to improve for corn? The July 2019 to December 2019 spread has pulled in by 3¢ over the last two weeks. If that spread continues to improve, then it shows corn is shifting to a demand-driven market,” Kluis told customers in a daily note.

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets will trade USDA data and movement of outside money, this week, analyst says.

At the close, the May futures finished 1½¢ higher at $3.79¾. July futures ended 1¾¢ higher at $3.89¼.
 
May soybean futures settled 2¢ higher at $9.06¾. July soybean futures closed 2¾¢ higher at $9.26.

May wheat futures finished 3½¢ higher at $4.69½.

May soymeal futures finished $0.10 per short ton higher at $315.10. May soy oil futures settled 0.16¢ higher at 28.82¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.13 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 38 points lower.

Jason Roose, U.S. Commodities, says that the market is well supported.

“Grains are all showing strength. The support is coming from short covering, ahead of Friday’s all-important grain stocks and Prospective Planting Report on Friday. Also, support is coming from export optimism and uncertainty on planting,” Roose says.

Al Kluis, Kluis Advisors, says that the funds’ positions and USDA data will dictate this week’s price direction.

“The CFTC Commitments of Traders report on Friday showed funds still very short corn, soybeans, and wheat. This will create a lot of buying on any setback,” Kluis told customers in a daily note.

He added, “Will the low come in early again this week (Monday or Tuesday) in the grain markets? Also watch the USDA report (Friday) and what the trade reaction is to the report.”

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