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Corn Closes 11¢ Higher, Soybeans 14¢ Higher Friday

All eyes are on the Midwest heat dome.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets surge higher, ahead of rocky weekend weather.

At the close, the Sep. corn futures finished 10¢ higher at $4.54 1/2. Dec. corn futures settled 11 1/4¢ higher at $4.59 1/4.
 
Aug. soybean futures settled 14 1/4¢ higher at $9.13 1/4. November soybean futures ended 14 1/4¢ higher at $9.31 1/2.

Sep. wheat futures closed 1 1/2¢ higher at $5.23 3/4.

August soymeal futures settled $2.40 per short ton higher at $314.80. August soy oil futures finished $0.13 higher at 28.31¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.01 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 180 points higher.

On Friday, private exporters reported to the USDA export sales of 104,100 metric tons of corn for delivery to Panama during the 2019/2020 marketing year.

Jason Roose, U.S. Commodities, says that it's a weather market.

“Grains are adding risk premium for the weekend, today, after yesterday's USDA crop report. Though the overall numbers were unchanged from last month’s report, but many uncertainties remain with the maturity of the crop, acres and yield. A hot and dry 6-10 day forecast is also adding extra premium,” Roose says.

Al Kluis, Kluis Advisors, says the hot and sticky weather will cause crop ratings to drop.

“Keep a close eye on the weather forecast. We need ideal weather to have a chance at saving this year’s crop. Right now, we expect some 90˚F. temps and dry conditions coming in for the heart of the Corn Belt. This is not ideal for the early planted corn that was on time,” Kluis told customers in a daily note.

Kluis added, “Well, the market did not believe much of what the USDA had to say in the report Thursday. We still have a lot of questions to be answered: How many prevent-plant acres will we have? Will the national yield come down in future reports. The USDA did not lower the national yield in this month’s report. Considering how late the crop is this year, we could easily see that happen. All in all, we will likely get futures reductions in the corn and soybean production, creating smaller carryout numbers.”

Commitment of Traders Report

On Friday, the CFTC’s Commitments of Traders Report showed the managed funds getting longer the corn market, while the producers and commercials extended short corn positions.

For soybeans, the managed money funds got shorter the market vs. a week ago, while producers and commercials remained with about the same net short positions vs. a week ago.

Corn

In detail, the producer/commercial investors cut corn long positions by 324 and added 17,044 shorts. This leaves them net short the corn market by 513,012 contracts.

Managed funds added 2,642 long positions, while cutting 2,251 long positions. This leaves this category of investors net long the corn market by 174,318 contracts.

Soybeans

Managed funds added 4,298 long positions but added 9,461 short positions vs. a week ago. This leaves the managed funds net short the soybean market by 45,750, an increased short position vs. a week ago.

For producers and commercials, they cut 217 long soybean positions while cutting 192 shorts. This leaves this category of traders net short the soybean market by 62,407 contracts, about equal to a week ago.

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Thursday’s Grain Market Review

On Thursday, all eyes are on the upcoming USDA Crop Production and Supply/Demand Reports at 11 a.m. (CDT). To begin with, the CME Group’s farm futures markets trade lower.

At the close, September corn futures finished 9¼¢ higher at $4.44¼; December corn futures finished 8½¢ higher at $4.48.
 
Auguat soybean futures are 4½¢ higher at $8.99; November soybean futures finished 4½¢ higher at $9.17¾.

September wheat futures closed 16¾¢ higher at $5.21½.

August soy meal futures settled $1.70 per short ton higher at $312.40. August soy oil futures closed 0.09¢ higher at 28.18¢ per pound.

In the outside markets, the NYMEX crude oil market is 20¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 150 points higher.

On Thursday, the USDA’s Weekly Export Sales Report unfavorable soybean, wheat figures.

  • Corn: 497,000 metric tons vs. the trade’s expectations of between 250,000-650,000 mt
  • Soybeans: 261,700 mt vs. the trade’s expectations of between 300,000-750,000 mt
  • Wheat: 284,400 mt the trade’s expectations of between 250,000-550,000 mt
  • Soybean meal: 52,600 mt the trade’s expectations of between 50,000-350,000 mt


Al Kluis, Kluis Advisors, says following today’s USDA Crop Production Report the trade will be focused on crop weather.

“Corn demand continues to fade; however, the 2019 corn crop is still in question. Watch the weather forecast to see how long the hot dry weather pattern for the Midwest will last. If the hot and dry weather forecasts persist more than 10 or 14 days, then this should provide some support to the corn market,” Kluis told customers in a daily note.

Kluis added, “The corn and soybean markets could settle in to a sideways trading range. The crop is growing, but we are still very far behind on progress. That should help keep us supported going forward.”

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Wednesday’s Grain Market Review

At midweek, the CME Group’s farm futures followed the soybean market higher.

At the close, September corn futures finished 2¼¢ higher at $4.35; December corn futures settled 2½¢ higher at $4.39¾.
 
August soybean futures ended 8½¢ higher at $8.94½; November soybean futures closed 8½¢ higher at $9.12¾.

September wheat futures settled 2¢ higher at $5.04½.

August soy meal futures closed $1.50 per short ton higher at $310.70. August soy oil futures settled 0.08¢ higher at 28.09¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.53 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 93 points higher.

Al Kluis, Kluis Advisors, says the markets are expected to remain choppy ahead of Thursday’s USDA Crop Production Report.

“One reason for this lower price trend the past few days is the funds could be unwinding some long corn vs. short soybean spreads. Wheat prices are trying to hold near last week’s lows, but that will be difficult to do if corn continues to slide lower,” Kluis told customers in a daily note.

Kluis added, “Cash corn prices across the Midwest are very strong. We are seeing record-tight basis levels in many areas. History tells us that bull markets led by strong cash prices are more resilient.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets mostly drop, as investors anticipate the July crop production data to be released Thursday.

At the close, September corn futures finished 7¢ lower at $4.32½; December corn futures ended 6½¢ lower at $4.37¼.
 
August soybean futures settled 7¢ higher at $8.86; November soybean futures closed 6½¢ higher at $9.04¾.

September wheat futures ended 8¼¢ lower at $5.02¾.

August soy meal futures settled $3.40 per short ton higher at $309.20. August soy oil futures closed 0.02¢ higher at 28.01¢ per pound.

In the outside markets, the NYMEX crude oil market is 7¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 69 points lower.

Jack Scoville, PRICE Futures Group, says investors are leaning on this week’s reports for guidance.

“We are trading the reports from yesterday afternoon and looking ahead to Thursday’s data. Corn should show higher production in Thursday’s report, due to increased planted area, although there could be some additional yield loss. Soybeans had reduced crop ratings by a point yesterday and has reduced area; this could be less on Thursday. Harvest is moving right along in wheat, and we need buyers. Not finding them to a large extent. I am seeing retail buying interest in corn on the weakness,” Scoville says.

Ray Grabanski, president of Progressive Ag Marketing, Inc., says the crop condition ratings are pressuring the market.

“With another improvement in crop yield potential, the summer is helping to shape up the crop and grow out of its wet funk. So prices are sagging. Corn is at risk of a head-and-shoulders top, and we are now on the right shoulder. It could become a sell on technical charts quite quickly unless some supportive news can come along quickly,” Grabanski says.

Al Kluis, Kluis Advisors, says the markets are expected to remain choppy ahead of Thursday’s USDA Crop Production Report.

“Monday’s USDA Crop Progress Report, showing lower-than-expected crop ratings for corn and soybeans, suggests the USDA is likely to take yields lower in the Supply/Demand Report on Thursday,” Kluis told customers in a daily note.

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Monday’s Grain Market Review

On Monday, the CME Group’s farm futures corn finished where it started, while soybeans inched up slightly.

At the close, September corn futures finished ¾¢ higher at $4.39½; December corn futures settled 1½¢ higher at $4.43¾.
 
August soybean futures ended 3¢ higher at $8.79; November soybean futures finished 3¼¢ higher at $8.97¼.

September wheat futures closed 4¢ lower at $5.11.

August soy meal futures closed unchanged per short ton at $305.80. August soy oil futures settled 0.43¢ higher at 27.99¢ per pound.

In the outside markets, the NYMEX crude oil market is 47¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 144 points lower.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that while the corn market had follow-through buying as we started the overnight session, midsession today, we’ve seen a little weakness.

“Last week’s buying was fueled by both bargain buyers doubting the USDA’s acreage estimate as well as a long-term forecast that included a warmer and drier forecast for most of the Corn Belt. With a crop that already feels compromised, weather will continue to be something eyed very closely by the markets. The old resistance that we ran into as we approached $4.50 per bushel once again held overnight and likely the reason for step back. I would suspect this market is reluctant to breach that resistance as we move into Thursday’s WASDE Report. While trade estimates do not indicate any large variance from the June numbers, we’ve been surprised before,” O’Connell says.

She added, “On a cash note, the basis levels on corn have been incredibly strong with some users paying as much as 10¢ over posted bid. I would suspect if we maintain a ‘shortage’ environment that this strength would continue. Also pushing futures higher. At some point, we will reach a tipping point, but seems they aren’t ready to back away yet,” O’Connell says.

Al Kluis, Kluis Advisors, says investors are trying to make sense of tariff talk between the U.S. and China.

“The comment Friday from China that it “will not buy U.S. ag products if the U.S. flip-flops on its promises” put pressure on the soybean market on a low-volume day of trade,” Kluis told customers in a daily note.

Kluis added, “Watch the corn continuation chart. The July-to-September corn gap is down to 1¢ this morning. The July contract expires Friday. That contract has made a huge gain against the September and December contracts in the last three trading days when the corn market turned higher.”

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