Soybean market goes over $10-per-bushel level Friday

Soybean prices have hit a 52-week high.

On Friday, the CME Group’s farm markets move higher, as a result of a friendly USDA Supply/Demand and WASDE Reports at 11:00 a.m. CT.

At midsession, the Dec. corn futures are 2¢ higher at $3.67¼. March corn futures are 1¼¢ higher at $3.76.
 
Sept. soybean futures are 26¢ higher at $10.11 per bushel. Nov. soybean futures are 19¢ higher at $9.96½. January soybean futures are 17¢ higher at $9.99¼.

Dec. wheat futures are 4¼¢ lower at $5.44. 

Dec. soymeal futures are $6.30 per short ton higher at $323.80. Dec. soy oil futures are 0.57¢ higher at 33.77¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.37 per barrel higher at $37.67. The U.S. dollar is lower, and the Dow Jones Industrials are 153 points higher.

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

  • Export sales of 222,000 metric tons of soybeans received during the reporting period for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 262,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

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

Corn = 1.82 million metric tons vs. the trade’s expectations of between 1.0 mmt and 1.9 mmt. 

Soybeans = 3.16 million metric tons. vs. trade’s expectations of 1.1 mmt to 1.9 mmt. Of that total, China bought 1.59 million metric tons.

Wheat = 484,400 mt. 

Soybean meal = 359,600 mt.

Bob Linneman, Kluis Advisors, says that investors were awaiting today’s USDA numbers at 11:00 a.m. CT.  

“History says the USDA does not make large changes to yield between the August and September reports. The exception to this trend is 2012. However, we did see large areas in Iowa and Illinois experience near-drought conditions toward the end of summer. Those losses are more likely to be seen in the January report,” Kluis told customers in a daily note.   

He added, “We could be setting up for a bearish reaction if the USDA releases smaller-than-expected decreases to yield. If that is how the report goes, will the trade believe the report? Will the funds step in and use a pullback to extend their already unseasonal long position?”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close mostly higher.

At the close, the Dec. corn futures finished 4¾¢ higher at $3.65. March corn futures ended 4¼¢ higher at $3.75.
 
Nov. soybean futures ended 1½¢ lower at $9.77½. January soybean futures closed 1¼¢ lower at $9.81.

Dec. wheat futures finished 4½¢ higher at $5.48½. 

Dec. soymeal futures closed $0.60 per short ton lower at $317.50. Dec. soy oil futures closed 0.01¢ lower at 33.20¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.66 per barrel lower at $37.39. The U.S. dollar is lower, and the Dow Jones Industrials are 330 points lower.

On Thursday, private exporters reported to the USDA export sales of 195,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Jack Scoville, PRICE Futures Group, says that today’s market action is kind of a consolidation trade in the beans before the reports tomorrow. 

“Corn is higher, again, with wheat. And, there are higher world prices for wheat anyway. Funds are buying the corn again, not so much in the beans. China bought U.S. soybeans today, but the market seems to have that factored in.  Maybe it is buying corn, but I have not heard anything on that either way. Soybean prices have been impressive lately. I am not sure why we are this high, unless the drop is being way overestimated by everyone,” Scoville says.

Bob Linneman, Kluis Advisors, says that the soybean market is staging an impressive multiple-session rally.  

“Soybean prices continue to press to higher highs. This is with the daily and weekly momentum indicators deeply overbought. The impressive daily export sales announcements over the past few weeks coupled with a drier August has given the bulls the fuel for this rally. Corn prices have managed to maintain trading within a nickel of the summer highs but have not been able to gain momentum on a push above those highs,” Kluis told customers in a daily note.   

He added, “The charts are flashing multiple signals of a turn in trend. The bulls have pushed momentum indicators deep into overbought territory. If the USDA report on Friday is friendly, will it be friendly enough to keep the bull camp happy.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s soybean market finished up, diverging from the corn and wheat markets. 

At the close, the Dec. corn futures finished 1½¢ lower at $3.60¾. March corn futures ended 1¼¢ lower at $3.70¾.
 
Nov. soybean futures settled 5¾¢ higher at $9.78¾. January soybean futures closed 5¢ higher at $9.83¼.

Dec. wheat futures settled ½¢ lower at $5.43½. 

Dec. soymeal futures closed $3.50 per short ton higher at $318.10. Dec. soy oil futures settled 0.19¢ lower at 33.21¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.38 per barrel higher at $38.14. The U.S. dollar is lower, and the Dow Jones Industrials are 648 points higher.

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

  • Export sales of 238,000 metric tons of soybeans for delivery to China 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.
  • The marketing year for soybeans began Sept. 1.

Al Kluis, Kluis Advisors, sees crop ratings and weather dominating the trade’s direction.   

“The USDA weekly crop report on Tuesday showed corn and soybean ratings dropping by 1%. This was close to what the trade had expected,” Kluis told customers in a daily note.   

He added, “The USDA Crop Progress report showed ratings dropping by 1%. This shows how difficult it is to get much change this late in the growing season. Most farmers tell me that the corn crop is what it is, that late rains will only help the late-planted soybeans, and that the yield increase will be minimal with mid-September rains.”

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Tursday’s Grain Market Review

On Tuesday, the CME Group’s farm markets end mostly higher.

At the close, the Dec. corn futures finished 3¾¢ higher at $3.61¾. March corn futures finished 3½¢ higher at $3.72.
 
Nov. soybean futures closed 5¢ higher at $9.73. January soybean futures ended 4¾¢ higher at $9.78¼.

Dec. wheat futures closed 6¢ lower at $5.44. 

Dec. soymeal futures settled $2.60 per short ton lower at $314.60. Dec. soy oil futures closed 0.51¢ higher at 33.40¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.80 per barrel lower at $36.97. The U.S. dollar is higher, and the Dow Jones Industrials are 641 points lower.

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

  • Export sales of 400,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 264,000 metric tons of soybeans received during the reporting period for delivery to China during the 2020/2021 marketing year.
  • Export sales of 101,600 MT of corn for delivery to unknown destinations during the 2020/2021 marketing year.

 The marketing year for corn and soybeans began Sept. 1.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that corn and soybean markets are trading either side of unchanged after the long holiday weekend.  

“With weather no longer having much of an impact of yield potential and crop condition scores becoming irrelevant, the market this week is focused on the upcoming WASDE that will be released Friday at 11:00 CST.  

“The trade has already priced in yield reductions in both markets, due largely to a hot and dry weather pattern that lingered across much of the Midwest in the month of August,” O’Connell says.  

“The supply side of the equation is also lending some support, with China continuing a steady cadence of both soybean and corn purchases.  Rumors continue to circulate regarding the crop damage within China, due to severe flooding for much of the growing season,” she says.  

For the 2020/2021 marketing year, 11.093 million tonnes of U.S. exports are attributed to China, including the assumed as “unknown,” according to O'Connell.  

“Should China experience a mediocre crop and continue to buy U.S. corn, that would certainly go a long way in helping reduce our projected ending stocks. With harvest on the horizon and the funds carrying a long position in both corn and soybeans, we are looking for a sideways trade into Friday,” she says.

Al Kluis, Kluis Advisors, sees weaker crop ratings to be reported this afternoon.   

“The USDA Crop Progress report today will show corn and soybean conditions 1 to 2 percentage points lower than last week. I expect both Iowa and Illinois ratings to take a hit as the dry pattern has expanded into northern Illinois. Ratings are very close to falling below last year’s level for this week,” Kluis told customers in a daily note.

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