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Corn, Soybeans Mixed Ahead of USDA Reports Friday

Investors watch for a surprise in today’s data dump.

DES MOINES, Iowa -- On Friday, soybeans move higher, with the trade preparing for the USDA June Acreage Report and Quarterly Grain Stocks Report.

In early trading, July corn futures are ¼¢ lower at $4.39; December corn futures are ¼¢ higher at $4.51.
 
July soybean futures are 6¾¢ higher at $8.94¼; November soybean futures are 6¼¢ higher at $9.18¾.

September wheat futures are 2¼¢ higher at $5.49¾. July soy meal futures are 90¢ per short ton lower at $311.30. July soy oil futures are 0.02¢ higher at 27.83¢ per pound.

In the outside markets, the NYMEX crude oil market is 34¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 45 points higher.

Al Kluis, Kluis Advisors, says investors are squarely focused on today’s USDA reports.

“What started to look like a quiet but higher trade Thursday eventually turned lower and closed rather poorly. Weekly export sales were another disappointment and the selling of July futures to roll forward caused the markets be pulled lower. Look for a choppy trade ahead of the much-anticipated USDA annual Acreage Report and the Quarterly Grain Stocks Report, out today,” Kluis told customers in a daily note.

Kluis added, “The USDA will likely adjust some of the planted acres in key states in future USDA report. With the wet weather we have had this year, it is still tough to figure out how many planted acres we will have.”

On Friday, private exporters reported to the U.S. Department of Agriculture export sales of 544,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year.
 
The marketing year for soybeans began Sept. 1.

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Thursday’s Grain Market Review

Commodity futures prices showed little movement Thursday as traders wait for key reports from USDA that many expect to be historic—even if they may not believe their accuracy. Both the quarterly grain stocks estimate and the June annual report on planted acres will be released by the National Agricultural Statistics Service at noon (EDT).

“This is a market-moving report. It’s one of the most important reports of the year,” says Don Roose of U.S. Commodities, Inc. in West Des Moines, Iowa.

The Acreage Report, which shows how closely farmers kept to their planting intentions in March, always interests the grain trade. But with this year’s planting delays and cool weather, it’s even more mesmerizing.

Commodity futures traders and others expect planted corn acres to be more than 6.1 million acres lower than the March planting intentions estimate of 92.792 million acres, says Roose.

“It would be a historic number. We’ve never seen losses in acres to this degree,” he says. The average trade estimate for tomorrow’s report is 86.662 million acres that actually got planted. That would also be 6.66% lower. (Roose noticed that embedded in both numbers is an eerie, apocalyptic 666.)

Of course, the USDA estimate isn’t likely to hit the trade estimate exactly.  And no matter what it is, the trade suspects farmers may have been unable to plant another 2 million acres, making actual plantings about 8 million acres below intentions. To catch that late-moving target, USDA extended the reporting deadline for planted acres this year from the usual June 1 to the middle of the month, Roose says.

“These are historical losses. It’s still very much an unknown. When you look at these numbers, the trade’s not going to believe them,” he says.

Although USDA hasn’t announced it, the trade also expects the Department to conduct a special survey of prevented planted acres, as it did during another unusually wet year in 1993. If so, that would likely be released in August or September, Roose says.

The trade looks for comparatively smaller trimming of soybean acres from the March intentions estimate of 84.617 million acres. The average guess  is 84.355 million planted acres  

“Because they’re planting late, the trade is going to treat that with skepticism,” Roose says. It’s even possible that enough unplanted corn acres get shifted into soybeans that planted bean acres could be larger than intentions.

Parts of the Corn Belt have struggled more than others. This week’s crop progress report showed that Ohio still had 20% of its corn crop left to plant, if it gets planted, and only 65% of its soybean crop was in the ground.

“Nebraska is probably the winner, and behind that, actually it’s  hard to believe, but it’s Iowa,” Roose says.

Much uncertainty remains for the growing season. Corn will likely pollinate in the third week of July in the western Corn Belt but not until the third week of August in Ohio and the eastern Corn Belt. That eastern area will need to remain frost free until late October for the corn crop to reach black layer maturity.

Is a bull market ahead?

That’s hardly certain, either. Corn production in Brazil, Argentina and Ukraine is expected to total about 2 billion bushels above last year, Roose says That’s almost enough to offset the expected loss of 2 to 2.5 billion bushels in U.S. corn production from what was expected earlier this year. Tomorrow’s grain stocks reports will shed more light on demand.

Late planting and cool conditions already have helped drive a weather market that saw new crop (December) corn futures rise from a low of $3.63¾ a bushel on May 13 to a high of $4.73 on June 17. Since then, the December contract has dropped in value to Thursday’s close of $4.51.

All this make’s tomorrow’s report one that every farmer should try to catch, even if it’s with your smart phone from the tractor cab.

At the close Thursday, July corn futures finished 3¼¢ lower at $4.40; December corn contracts were 3½¢ lower at 4.51.

July soybean futures ended 6½¢ lower at $8.87¾; November soybean futures were down 6¢ at $9.12¼.

September wheat futures were ¼¢ higher at $5.46¾.
 
July soy meal futures are $1.20 a short ton lower at $312.20. July soy oil futures were unchanged at $27.81 per pound.
 
In the outside markets, the NYMEX crude oil market is 11¢ higher, the U.S. dollar is slightly higher, and the Dow Jones Industrials are 56 points higher.

At midsession Thursday, July corn futures are 4¢ lower at $4.39¼; September corn contracts are trading 3¢ lower at 4.46½.

July soybean futures are 5¼¢ lower at $8.89; September soybean futures are down 4¾¢ at $9.01¼.

September wheat futures are 3¾¢ lower at $5.42¾.
 
July soy meal futures are $1 a short ton lower at $312.40. July soy oil futures are 7¢ lower at $27.74 per pound.
 
In the outside markets, the NYMEX crude oil market is 6¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 14 points higher.


“The markets are settling back towards recent support as it waits for tomorrow's release of the Quarterly Grain Stocks and Acreage report,” says Mike North, president of Commodity Risk Management Group in Platteville, Wisconsin. “ Given the speculative rush to purchase grain contracts, profit taking ahead of the much awaited numbers is not uncommon.”

In early trading Thursday, July corn futures are up ¼¢ at $4.43½; September futures are up ½¢ higher at $4.50.

July soybean futures are 1¢ higher at $8.95¼; September soybean futures are 1¼¢ higher at $9.07¼.

September wheat futures are 4¼ higher at $5.50¾.

July soy meal futures are 30¢ a short ton higher at $313.70. July soy oil futures are 5¢ higher at 27.86¢ per pound.
 
In the outside markets, the NYMEX crude oil market is 12¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are down 14 points

USDA’s Foreign Agricultural Service reported weekly export sales this morning. Old-crop and new-crop delivery net sales of corn were 405,000 metric tons. That’s about midrange of trade estimates of 125,000 to 800,000 MT. Soybean net sales totaled 487,800 metric tons, near the lower end of trade estimates ranging from 350,000 to 800,000 MT. Soy meal sales reported today at 69,800 MT, below trade estimates of 75,000 to 275,000 MT. Wheat export sales of 405,000 MT were near the upper end of trade estimates ranging from 150,000 to 650,000.

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets drop as investors eye big reports Friday.

At the close, July corn futures finished 4¼¢ lower at $4.43½; December corn futures end 3¢ lower at $4.54¼.
 
July soybean futures settled 9½¢ lower at $8.94¼; November soybean futures closed 8¼¢ lower at $9.18¾.

September wheat futures closed 8¢ higher at $5.43¾.

July soy meal futures ended $2.30 per short ton lower at $313.40. July soy oil futures settled 0.19¢ lower at 27.81¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.63 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 48 points higher.

Private exporters reported to the U.S. Department of Agriculture export sales of 145,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
 
The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says investors are positioning themselves ahead of Friday’s USDA reports.

“The encouraging aspect to the softer close in the grains was that volatility ended the day lower, as well. This is good if you are in the market to buy options. However, volatility levels are still nearly triple what they were seven weeks ago. It is likely safe to say we will see these elevated levels for a better part of this growing season,” Kluis told customers in a daily note.

Kluis added, “All eyes are on the USDA report to be released at 11 a.m. on Friday. Volatility is high. Traders and analysts are still trying to determine what the report will say. This report could easily be one of the most volatile we have seen since 2012.”

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Tuesday’s Grain Market Review

On Tuesday, investors watched a choppy market end mostly lower after building in poor crop conditions reported in yesterday’s Crop Progress Report.

At the close, July corn futures finished ¾¢ higher at $4.47½; December corn futures finished ¼¢ higher at $4.57¼.
 
July soybean futures settled 5½¢ lower at $9.03½; November soybean futures closed 6¼¢ lower at $9.26¾.

September wheat futures closed 2¼¢ lower at $5.35¾.

July soy meal futures closed $1.90 per short ton lower at $315.70. July soy oil futures finished 0.35¢ lower at 28.00¢ per pound.

In the outside markets, the NYMEX crude oil market is 18¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 190 points lower.

Jack Scoville, PRICE Futures Group, says the markets will continue to trade mixed.

“We were higher, but now fading a bit. We can expect more like this, I think. We are seeing some buying related to the crop updates last night. The condition of corn and beans not real strong, and the progress is a little lower than anticipated. But we got the export sales report that should not show any big demand on Thursday plus the Friday reports, FND, and the G-20 meetings at the end of the week to keep the market choppy,” Scoville says.  

Scoville added, “Volume not real big, so far today, as far as I can tell. And it looks like a slow end of the month is coming except for those with lots of July positions to close or move,” Scoville says.

Al Kluis, Kluis Advisors, says the Monday Crop Progress Report was viewed as positive for grain prices.

“The USDA Crop Progress Report on the soybean crop is in trouble. The first soybean crop rating came out on Monday, with only 54% of the nation’s soybeans rated good to excellent. This compares with 73% last year and 69% in the five-year average. The last time it was this low was 1993, when the first rating came out at 60% good/excellent,” Kluis told customers in a daily note.

Kluis added, “We are watching the weather and individual state reports for Illinois, Indiana, and Ohio. Those states still have 9 million acres of soybeans to plant. After the weekend rain, it may be July before they get back into the field.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets trade higher.

On Monday, the USDA will update the Crop Progress Report at 3 p.m. (CDT), releasing its first rating for soybean crop conditions. The trade expects the corn good/excellent rating to move up slightly.

At the close,July corn futures finished 4½¢ higher at $4.46¾; December corn futures closed 3¾¢ higher at $4.57¼.
 
July soybean futures closed 6¼¢ higher at $9.09; November soybean futures finished 5¼¢ higher at $9.32¼.

September wheat futures settled 12¢ higher at $5.38.

July soy meal futures ended $2 per short ton higher at $317.60. July soy oil futures settled 0.09¢ lower at 28.35¢ per pound.

In the outside markets, the NYMEX crude oil market is 23¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 18 points higher.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says investors have a lot of information to digest this week.

“All eyes this week will be on the Monday Crop Progress Report and, to a larger degree, Friday’s Planted Acreage Report. I would suspect a lot of back and forth this week as traders square up positions,” O’Connell says.

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