Corn Edges Higher Thursday
DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets closed mixed.
At the close, the Sep. corn futures finished 1 3/4¢ higher at $3.60 3/4. Dec. corn futures ended 3/4¢ higher at $3.71.
Sep. soybean futures closed 7 1/2¢ lower at $8.58. November soybean futures settled 7 1/4¢ lower at $8.70 3/4.
Sep. wheat futures closed 3 3/4¢ lower at $4.74 1/2.
December soymeal futures closed $3.00 per short ton lower at $296.90. December soy oil futures closed $0.10 lower at 29.45¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.93 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 22 points higher.
On Thursday, the USDA’s Weekly Export Sales Report shows lackluster corn, strong soybean and wheat figures.
Corn= 363,700 metric tons vs. the trade’s expectations of between 250,000-600,000 mmt.
Soybeans= 927,300 mt. vs. the trade’s expectations of between 150,000-700,000 mt.
Wheat= 474,500 mt. the trade’s expectations of between 250,000-500,000 mt.
Soybean meal= 144,200 mt. the trade’s expectations of between 175,000-400,000 mt.
Al Kluis, Kluis Advisors, says investors are mixed on the markets.
“Typically, we see sell-offs in the market span over three days. Wednesday would have made it day three. With the sell-off in the grains and livestock – and U.S. stock markets – investors are heading to the sidelines in a risk-off fashion to preserve cash. Expect choppy two-sided trade. Selling in U.S. grain prices seems to be drying up a little,” Kluis told customers in a daily note.
Kluis added, “The U.S. corn market will trade in a sideways pattern between $3.70 and $3.90 for the next three to four weeks. When we get the next USDA Crop Production Report (September), we will watch for cuts in the U.S. corn yield.”
Wednesday’s Grain Market Review
On Wednesday, the CME Group’s soybean market closes off a dime.
At the close, September corn futures finished 7¢ lower at $3.59; December corn futures settled 6¾¢ lower at $3.70¾.
September soybean futures closed 10¾¢ lower at $8.65½; November soybean futures ended 11¢ lower at $8.78.
September wheat futures closed 1¾¢ higher at $4.73¾.
December soy meal futures settled $4.70 per short ton lower at $299.90. December soy oil futures closed 0.01¢ higher at 29.55¢ per pound.
In the outside markets, the NYMEX crude oil market is $2.02 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 713 points lower.
Dustin Johnson, AgYield senior strategist, says today’s lower markets are a result of some margin pressure on the longs pushing things further after such a large move since the report release.
“Also, U.S. trade officials are urging everyone to ‘be patient’ on U.S.-China trade agreements, which did not send a good signal for a deal in September. This was basically an equal drop in beans to the increases from yesterday, when the U.S. granted some targeted allowances to avoid the import tariffs. And lastly, energies and equities have been hit hard from Chinese trade data and escalation in Hong Kong, which could be fueling some of this selling in grains,” Johnson says.
Al Kluis, Kluis Advisors, says investors are now focused on weather.
“Traders will start to put more emphasis on the 30-day forecasts. That window will push through mid-September by the end of this week and should provide valuable insight regarding frost. The outside markets are slightly calmer today. There are reports that some products will not be impacted by the higher tariff. Is there still a chance that some agricultural products get put on that list? For now, we are forced to wait for that answer,” Kluis told customers in a daily note.
Kluis added, “The recent Crop Progress Report showed that soybeans setting pods is at 54% this year. That is 22 percentage points below the five-year average. Those key spots across the Midwest that have not seen measurable rainfall for a few weeks are going to see a big shock to yield if moisture doesn’t arrive soon.”
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s corn market continues to suffer from yesterday’s negative USDA report.
At the close, September corn futures are 12¾¢ at $3.73; December corn futures are 10¾¢ lower at $3.82.
September soybean futures are 10¾¢ higher at $8.77½; November soybean futures are 10¾¢ higher at $8.90.
September wheat futures are 6¼¢ higher at $4.78.
December soy meal futures are $4.80 per short ton higher at $303.50. December soy oil futures are 0.31¢ lower at 29.74¢ per pound.
In the outside markets, the NYMEX crude oil market is $2.16 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 427 points higher.
Jack Scoville, PRICE Futures Group, says it’s a tale of two markets today.
“Corn seeing follow-through selling from the USDA reports now has filled a gap below and still finding selling. I think it is going to make a big-time low here in the next couple of days, once this round of selling is over. But, an ugly and sad state of affairs and I have real problems with the USDA corn estimate,” Scoville says.
He added, “It is what it is and it will be revised significantly in coming reports, but for now we trade big production and less demand. Beans are higher on the moves by Trump to foster some communication with the tariff delays and China supposedly interest in U.S. ag again. It's probably just pork, I can’t imagine why China wants U.S. beans when it can get them cheaper in Brazil. Specs and funds selling the corn, not sure who is buying the beans, probably specs,” Scoville says.
Al Kluis, Kluis Advisors, says investors are selling from yesterday’s USDA numbers that sent the market tumbling.
“The grain markets were sharply lower on Monday after the release of the very bearish USDA Crop Production Report and the Supply/Demand Report. The hard drop in ethanol prices added to the selling pressure in corn,” Kluis told customers in a daily note.
Kluis added, “What really are soybean crop conditions now? Only 54% of the nation’s crop is rated good to excellent. The USDA soybean crop yield estimate is 48½ bushels per acre. We think that is too high and will move lower in future reports.”
Monday’s Grain Review
On Monday, the CME Group’s farm markets have fallen, at the open, as investors await the 11 a.m. CDT release of the USDA Crop Production and WASDE Reports.
In early trading, September corn futures are 5¼¢ lower at $4.05; December corn futures are 5¼¢ lower at $4.12.
September soybean futures are 7¢ lower at $8.72; November soybean futures are 7¢ lower at $8.84¾.
September wheat futures are 4½¢ lower at $4.95.
December soy meal futures are $3.00 per short ton lower at $300.70. December soy oil futures are 0.08¢ lower at 29.87¢ per pound.
In the outside markets, the NYMEX crude oil market is 29¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 145 points lower.
Al Kluis, Kluis Advisors, says investors will be watching closely today’s USDA data dump.
“Today’s USDA corn and soybean yield estimates will be the highest of the year. The August yield survey and satellite imagery was taken right around August 1, it has stayed dry for the last 12 days in the central Corn Belt, and crop conditions have moved lower. The USDA Crop Production Report (to be released 11 a.m. CDT Monday, August 12),” Kluis told customers in a daily note.
Kluis added, “We are watching two sets of numbers. First, what size are the 2019 corn and soybean crops now? Second, what will the USDA say about acres in the 11 a.m. reports? The USDA production estimates are likely to be higher than the current private trade estimates. However, projections are likely to move lower in future reports, especially if the dry weather pattern continues in the central Corn Belt.”