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Wheat Market Proves to Be Friday’s Darling

Export sales keep support under lackluster markets.

DES MOINES, Iowa -- On Friday, with the exception of wheat prices, the ag markets show little life.

At the close, the Dec. corn futures finished ¼¢ higher at $3.68¾. March corn futures closed ½¢ lower at $3.78½.
 
Jan. soybean futures settled 4¢ lower at $8.97. March soybean futures closed 4¢ lower at $9.11¼.

March wheat futures finished 6¾¢ higher at $5.18¾.

January soymeal futures ended $2.00 per short ton lower at $301.20. January soy oil futures finished 0.18¢ higher at 31.06¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.68 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 114 points higher.

Jason Roose, U.S. Commodities, says that the farm markets stay mixed.

“Harvest is slowly coming to a close. Weather will be the deciding factor of how much will be totally complete by year end. The U.S., China trade talks still seem to be the focus of all markets. The currency in U.S. and Brazil and weather in South America will be closely watched the next few weeks for market moves,” Roose says.

Al Kluis, Kluis Advisors, says that the cash markets could be improving even more soon.
 
“The second round of MFP hitting farmers over the next couple weeks will be positive to corn and soybean basis levels. Farmers will get some much-needed cash and be less likely to sell cash grain. December corn and wheat options expire today. What strike prices will come into play? Will December corn hang around the $3.70 level and exercise the $3.70 puts or calls?” Kluis poses in a daily note.

He added, “The weekly export sales reports were pretty good for all three grains Thursday morning. Corn is still lagging behind for the year, but we are seeing an uptick in the last three weeks. Soybeans saw another great week of export sales. However, with the U.S./China trade deal on hold until perhaps after January 1, the market struggles to maintain an uptick.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s grain markets close mostly lower.

At the close, the Dec. corn futures finished 1¾¢ higher at $3.68. March corn futures closed 1¾¢ higher at $3.79.
 
Jan. soybean futures closed 4¢ lower at $9.01. March soybean futures ended 3¾¢ lower at $9.15¼.

Dec. wheat futures finished 6½¢ lower at $5.09.

December soymeal futures settled $1.20 per short ton higher at $301.00. December soy oil futures closed 0.51¢ lower at 30.69¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.55 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 5 points lower.

Britt O’Connell, cash advisor for Commodity Risk Management Group, says that corn and soybeans continue to trade in a choppy range today.

“Corn has continued to see sellers and is now considered very oversold. Demand has been very weak for corn, but with the recent slide in prices, the U.S. is now becoming competitive with corn out of SA and the Black Sea region. Traders will begin to pay more attention to our weekly exports, hoping to see more purchases from that front,” O’Connell says.  

Friday, the USDA will release its Cattle on Feed Report; traders are expecting October placements to come in 11.4% over last year.  

While these are viewed as positive for the corn market, it appears we will need some additional positive catalyst to spark short covering from the funds, she says.   

“Soybeans are having a hard time finding something positive to trade this week. Thoughts that ‘stage 1’ could roll into next year and a better weather picture in S.A. has soured the market view. Soybeans violated key support yesterday and will need a close above the $9.13 per bushel area to prevent further selling,” O’Connell says.

Al Kluis, Kluis Advisors, says the markets are searching for trade news.
 
“We could see the grain markets settle into stagnant conditions until we get the USDA’s final 2019 Crop Production Report (to be released January 10, 2020),” Kluis told customers in a daily note.

He added, “Yesterday we had another day of disappointing lower trade for U.S. grain prices. The markets are just looking for some positive news to trade on. Until then, no new news will keep us drifting lower. There was a rumor out on Wednesday that phase 1 of the U.S./China trade deal may, in fact, not get signed until after the first of the year.”

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

  • Corn: 88,000 metric tons (mt) vs. the trade’s expectations of between 400,000 and 900,000 mt
  • Soybeans: 1.51 mmt vs. the trade’s expectations of between 800,000 and 1.4 mmt
  • Wheat: 438,000 mt vs. the trade’s expectations of between 200,000 and 500,000 mt
  • Soybean meal: 196,000 mt vs. the trade’s expectations of between 100,000 and 450,000 mt

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Wednesday’s Grain Markets Review

On Wednesday, the CME Group’s markets turn weaker.

At the close, December corn futures finished 3¼¢ lower at $3.66¾; March corn futures ended 3½¢ lower at $3.77.
 
January soybean futures settled 6½¢ lower at $9.05; March soybean futures closed 5¼¢ lower at $9.19½.

December wheat futures closed 3½¢ higher at $5.18¾.

December soy meal futures settled $2.20 per short ton lower at $299.80. December soy oil futures closed 0.24¢ higher at 31.20¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.70 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 152 points lower.

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Tuesday’s Grain Market Review

At the close of Tuesday’s trading, corn and soybean futures settled slightly higher, paring earlier gains.                       

December corn futures closed 2¼¢ higher at $3.70; March corn settled 3½¢ higher at $3.80¾.

January soybean futures ended 1¼¢ higher at $9.11½; March soybean futures were 1½¢ higher at $9.24½.

December wheat futures closed 4¾¢ higher at $5.12

December soy meal futures closed 80¢ per short ton higher at $302. December soy oil futures settled 0.32¢ higher at 30.96¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.86 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 78 points lower.

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 At midday Tuesday, grains futures are higher.

December corn futures are up 3¾¢ at $3.71; March corn is 4¼¢ higher at $3.81½.
 
January soybean futures are 2½¢ higher at $9.12¾; March soybean futures are 2½¢ higher at $9.25½.

December wheat futures are 6½¢ higher at $5.13¾.

December soy meal futures are $1 per short ton higher at $302.20. December soy oil futures are 0.30¢ higher at 30.94¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.51 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 91 points lower.

Don Roose of U.S. Commodities in West Des Moines, Iowa, sees several factors driving higher grain futures prices Tuesday.

“It’s been firming up on corn,” he says, partly due to short covering on both corn and wheat contracts. “We have options expiration on Friday,” he adds.  That, along with holiday-shortened trading next week, is giving those who are short corn incentives to exit.

Recent USDA reports of corn exports and the fact that U.S. prices are now competitive with foreign corn exporting nations also help add a floor to corn prices, Roose says. He believes traders are reacting to Monday’s Crop Progress Report that showed corn harvest lagging in states on the northern edge of the Corn Belt.

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In early trading Tuesday, December corn futures are up by 2¼¢ at $3.70; March corn is also 2¼¢ higher at $3.79¾.

January soybean futures are 5½¢ higher at $9.15¾; March soybean futures are 5¾¢ higher at $9.28¾.

December wheat futures are ½¢ lower at $5.06¾.

December soy meal futures are 50¢ per short ton higher at $301.70. December soy oil futures are 0.35¢ higher at 30.99¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.05 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 27 points higher.

On Tuesday, the Foreign Agricultural Service said that private exporters reported to the USDA export sales of 191,000 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

Al Kluis of Kluis Commodity Advisors says, “I am watching the open interest in the December corn options, which expire on Friday November 22. At this time, it looks like December corn will end up between $3.60 and $3.70 on Friday.”

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Monday’s Grain Markets Review

At the close of Monday’s trading, corn and soybean futures settled lower.                      

December corn futures closed 3½¢ lower at $3.67¾; March corn settled 3½¢ lower at $3.77¼.

January soybean futures ended 8¢ lower at $9.10¼; March soybean futures were 7¾¢ lower at $9.23.

December wheat futures closed 4½¢ higher at $5.07¼.

December soy meal futures closed $5.90 per short ton lower at $301.20. December soy oil futures settled 0.21¢ higher at 30.64¢ per pound.

In the outside markets, the NYMEX crude oil market is 98¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 32 points higher.

Although wheat futures were initially lower, they ended the day strong.

“On wheat, I have no idea why it is so firm” says Jack Scoville, senior analyst of the PRICE Futures Group, “but the corn and beans are weaker as the harvest continues and starts to wind down. Farmers are not really offering and basis is very strong, but the spec does not seem to care. They keep selling on ideas of good supplies and no big takers and so far they are getting away with it. We did some corn to unknown destinations but that did not cause a reaction. Some producers are buying calls or futures as they sell into the basis. We need something to happen around here to push the market higher, and right now I am not sure what that will be.”

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At midday Monday, grain futures remain under pressure, with soybean prices adding to morning losses.

December corn futures are down by 2¾¢ at $3.68½; March corn is also down 2¾¢ at $3.78.
 
January soybean futures are 7¼¢ lower at $9.11; March soybean futures are 6¾¢ lower at $9.24.

December wheat futures are 7¢ higher at $5.09¾.

December soy meal futures are $5.80 per short ton lower at $301.30. December soy oil futures are 0.30¢ higher at 30.73¢ per pound.

In the outside markets, the NYMEX crude oil market is 91¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 19 points higher.

“At the start of the week, improving weather in South America along with what is perceived as ‘ongoing harvest progress’ has brought some pressure to morning markets,” says Mike North, president of Commodity Risk Management Group in Platteville, Wisconsin. “The Chinese trade war has seen little by way of absolute progress, which has traders growing weary of the hope to see improvements in exports long term. Traders have been unwinding long positions and adding to shorts across the grain complex. Chart support has been violated on a number of fronts giving rise to ongoing technical selling. With little by way of news, the downward channels developing in these markets has a growing likelihood of continuation.”

The group’s cash adviser, Britt O’Connell, says, “Corn continues to struggle in maintaining or gaining any help from the demand side of the equation. Yields from the field on both corn and beans continue to be strong relative to expectations, albeit very wet.  Basis seems to be doing all of the heavy lifting in corn.”

“Funds continue to add to their short positions in corn, first technical support comes in today near 3.70, December,” Britt says. “Typically corn finds itself rangebound this time of year and it doesn’t appear that this year is any different. Soybeans need to hold support today from a tech perspective at 9.10 vs. January.  With no significant progress on ‘Stage 1’ of a trade deal, the market has little to give it lift. The harvest was looking for a reduction
in harvested acres from the November WASDE. With no significant changes to the balance sheet, beans seem content to drift lower.”

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In early trading Monday, December corn futures are down by 2¼¢ at $3.69; March corn is also down 2¼¢ at $3.78½.
 
January soybean futures are 3¾¢ lower at $9.14½; March soybean futures are 3¾¢ lower at $9.27.

December wheat futures are 3¢ lower at $4.99¾.

December soy meal futures are $2.50 per short ton lower at $304.60. December soy oil futures are 0.10¢ higher at 30.53¢ per pound.

In the outside markets, the NYMEX crude oil market is 43¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 4 points higher.

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