Soybean Futures Close Higher on Signs of Demand
Soybean futures closed higher Friday on optimism about demand after a positive export sales report and a trade deal with the European Union.
Export sales of soybeans totaled 1.5 million metric tons, the USDA said in a report on Thursday, vs. trade expectations for 400,000 to 900,000 tons. Corn sales totaled about 1.09 million metric tons, within forecasts for 650,000 to 1.5 million tons. Wheat sales of 385,900 tons also were in line with expectations for 200,000 to 500,000 tons.
President Trump and European Commission President Jean-Claude Juncker said in a press conference in Washington earlier this week that the EU will buy more soybeans from the U.S. They also said they're working toward reducing or eliminating tariffs.
On Friday, the USDA announced fresh corn and soybean sales. Private exporters sold 270,000 metric tons of corn for delivery to unknown destinations during the 2018-2019 marketing year that starts on Sept. 1, and 154,100 metric tons of soybeans, also to unnamed buyers, for delivery in the 2018-2019 year.
Soybean futures for November delivery rose 9 1/2¢ to $8.85 1/4 a bushel on the Chicago Board of Trade. Soy meal futures finished unchanged at $331.70 a short ton, and soy oil gained 0.37¢ to 28.95¢ a pound.
Corn was unchanged at $3.75 3/4 a bushel on Friday.
Wheat dropped 6 1/4¢ to $5.30 1/4 a bushel, while Kansas City futures lost 1 3/4¢ to $5.32 1/4 a bushel.
Thursday’s Grain Market Review
On Thursday, the CME Group’s ag markets have found support in global wheat crop problems and demand.
At the close, September corn futures settled 2¼¢ higher at $3.61½; December futures finished 2½¢ higher at $3.75¾.
August soybean futures closed ½¢ higher at $8.61¼; November soybean futures finished ¼¢ higher at $8.76.
September wheat futures ended 6¼¢ lower at $5.36½.
September soy meal futures are $2.70 per short ton higher at $332.10. August soy oil futures are 0.26¢ lower at 28.15¢.
In the outside markets, the NYMEX crude oil market is 31¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 151 points higher.
Jack Scoville, The PRICE Futures Group’s senior market analyst, says the buying seen overnight and early today seemed to come from the spring wheat crop tour that keeps showing disappointing yield potential.
“Also helpful is the news of peace in the trade wars with the EU. Beans especially strong due to Trump saying that the EU would buy a lot of beans from the U.S.,” Scoville says.
He adds, “The reality is that we already knew that. USDA has dialed that type of buying by people other than China into the market. In addition, the EU can not force private importers to buy U.S., but the spread between U.S. and Brazil dictates that they will.”
Scoville sees this as a hollow victory for President Trump.
“But he needed something to show people and this is what he got, things that were likely to happen anyway,” Scoville says.
The markets have seen some selling since then, some farm-selling due to the price improvement and some spec long liquidation based on the EU ideas of buying here anyway and already part of the market, he says.
“We can set back a little now, but I like the long side longer term,” Scoville says.
On Thursday, the USDA released price-favorable Weekly Export Sales figures.
- Corn: 1.086 mmt vs. the trade’s expectations of between 650,000 and 1,500,000 mt
- Soybeans: 1.501 mmt vs. the trade’s expectations of between 400,000 and 900,000 mt
- Soybean meal: 204,000 mt vs. the trade’s expectations of between 50,000 and 250,000 mt
- Wheat: 385,900 mt vs. the trade’s expectations of between 200,000 and 500,000 mt
Wednesday’s Grain Market Review
World crop problems have pushed the CME Group’s wheat market up double digits Wednesday.
At the close, September corn futures finished 7¼¢ higher at $3.59¼; December futures closed 7¼¢ higher at $3.73¾.
August soybean futures finished 2¾¢ higher at $8.60¾; November soybean futures finished 2½¢ higher at $8.75¾.
September wheat futures ended 32½¢ higher at $5.42¾.
August soy meal futures closed $1.10 per short ton higher at $330. August soy oil futures settled 0.17¢ higher at 28.41¢.
In the outside markets, the NYMEX crude oil market is 72¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 20 points higher.
Jason Roose, U.S. Commodities, says the grain markets are finding solid support today.
“As the world turns its focus away from the potential large U.S. grains crops to the reduction in European and Ukraine crops led by the wheat, which could potentially lead to stronger exports, the markets are going higher.”
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s farm markets closed mixed, due to spread trading between corn and soybeans.
At the close, September corn futures ended 5¼¢ lower at $3.52; December futures closed 5¼¢ lower at $3.66.
August soybean futures finished 10¼¢ higher at $8.58; November soybean futures settled 10½¢ higher at $8.73¼.
September wheat futures closed 3½¢ lower at $5.10¼.
August soy meal futures closed 90¢ per short ton higher at $328.90. August soy oil futures settled 0.27¢ higher at 28.24¢.
In the outside markets, the NYMEX crude oil market is 57¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 162 points higher.
Mike North, president Commodity Risk Management Group, says there has been some recent spreading, soybeans vs. corn.
“The down day in corn invited some buyers back to soybeans. Against an increase in crop conditions, soybeans may now be able maintain technical momentum if further downside in corn is experienced,” North says.
Regarding the big news of the day, maybe in years, President Trump cutting a $12 billion to the agricultural sector for damage done by trade tariffs, North doesn’t see any price boost from it.
“The deal isn’t done, so we are not likely to see much by way of immediate response.”
North adds, “Subsidies do not drive prices higher. Quite contrary, they give no signal to slow down production and long term may impact prices more negatively.”
Monday’s Grain Market Review
On Monday, the farm futures market weakened as the session went along, with only corn finishing higher.
Despite the money managers adding to their shorts, favorable crop-weather, and trade tariffs, corn prices are in the green.
At the close,September corn futures finished 2¢ higher at $3.57; December futures ended 2¼¢ higher at $3.71.
August soybean futures settled 2¢ lower at $8.47¾; November soybean futures finished 2¢ lower at $8.62¾.
September wheat futures closed 2¼¢ lower at $5.13¾.
August soy meal futures settled $1.10 per short ton higher at $328.00. August soy oil futures closed 0.25¢ lower at 27.97¢.
In the outside markets, the NYMEX crude oil market is 60¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 36 points lower.
Jack Scoville, The PRICE Futures Group’s senior market analyst, says it’s a nice start to the week.
“Trading is tied mostly to weather and not to trade issues for a change. The weather is iffy enough and prices have dropped far enough so that the market can recover,” Scoville says.
Crops appear to be in mostly good condition, but there are still some issues in Missouri and then up along the Iowa-Minnesota border, Scoville says.
“Plus, it’s too dry in parts of Ohio. The market anticipates a drop of a point or two in crop conditions tonight. Farmers have no interest in selling, and it looks like specs are covering shorts to me,” Scoville says.
On Monday, private exporters reported to the USDA cancellations of optional origin sales totaling 165,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year. An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.
The marketing year for soybeans began September 1.
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