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Soybeans Pop Friday

The soybean market is offering selling opportunities.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets show a lot of strength on the back of the soybean complex.

At the close, the July corn futures finished 3¼¢ higher at $3.98. December futures ended 3¢ higher at $4.14.

July soybean futures closed 16¾¢ higher at $10.56¼. November soybean futures settled 13¾¢ higher at $10.47.

July wheat futures ended 9¢ higher at $4.98½.

July soy meal futures settled $14.00 per short ton higher at $393.20. July soy oil futures ended 0.36¢ lower at 30.73¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.21 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 2 points lower.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says that the soybean market is rallying off of investors’ belief that the trade war talk will fade.

“There is talk around that there will be peace in the trading wars in our lifetime,” Scoville says.  

He adds, “The U.S. is sending the treasury secretary and the lead trade negotiator to China next week. and ideas are that such a high-level delegation would not go unless there is almost a deal.  That seems to be the main spark today.”

The Kansas Wheat Tour is next week, and the trade is expecting some bad crop reports, he says.  

“Corn is finding its own support on what appears to be consumptive demand, but not hearing anything special. Yet, China floating the beans’ boat today,” Scoville says.

 

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close mostly lower, with the exception of soybeans.

At the close, the July corn futures finished ½¢ lower at $3.95; December futures ended 1¢ lower at $4.11.

July soybean futures closed ½¢ higher at $10.39; November soybean futures settled 1½¢ lower at $10.33.

July wheat futures settled 9½¢ lower at $4.89½.

July soy meal futures closed $2.80 per short ton higher at $383.30. July soy oil futures closed 0.03¢ higher at 31.09¢ per pound. 

In the outside markets, the NYMEX crude oil market is 14¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 293 points higher.

Jason Roose, U.S. Commodities, says the farm markets are choppy today with mild support in the soybean complex.

“Weather is the dominant factor in the next few weeks, as a warm/dry pattern continues in the Midwest. This could add corn acres and lower bean acres,” Roose says.

He adds, “Poor exports sales for corn and soybeans will limit any risk premium at these levels.”

The USDA’s Weekly Export Sales Report Thursday shows that corn and soybean sales missed their expected levels.

  • Corn: 773,700 metric tons (mt) vs. the trade’s expectations of between 900,000 and 1,600,000 mt
  • Soybeans: 537,800 mt vs. the trade’s expectations of between 700,000 and 1,200,000 mt  
  • Wheat: 577,900 mt vs. the trade’s expectations of between 300,000 and 600,000 mt
  • Soybean meal: 264,500 mt vs. the trade’s expectations of between 125,000 and 300,000 mt

On Thursday, separate from the Weekly Export Sales Report, USDA announced fresh corn sales.

Private exporters reported to the USDA export sales of 107,600 metric tons of corn for delivery to unknown destinations during the 2017/2018 marketing year.

The marketing year for corn began September 1.

Selling Opportunity?

Jim Plagge, Bank Iowa CEO, agrees that planting weather is on the front burner for the farm markets.

“Delayed planting this spring is causing market volatility and opportunities to sell old-crop grain and new-crop grain at higher prices than we’ve seen for a while, especially on new crop,” Plagge says.

Plagge adds, “Selling into rallies incrementally, a little here and a little there, to make sure you’re covering cash flow needs and basic costs, is generally a good strategy considering the opportunities in the marketplace today.”

Plagge also sees the market volatility amplified by outside factors such as the China trade tariff talk.

“If that chatter disappears and we have several more weeks of favorable weather, grain markets could turn bearish quickly and some of the opportunity we have right now would disappear,” Plagge says.

Plagge adds, “Planting is certainly behind schedule but producers can put the crop in the ground quickly, and the 15-day forecast looks favorable. If that forecast proves to be correct, we could still end up within a fairly normal planting completion timeline.”

 

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Wednesday’s Grain Market Review

Midweek strength shows up in the ag commodities’ space.

At the close, the July corn futures finished 5¾¢ higher at $3.95¾; December futures finished 5¾¢ higher at $4.12¼.

July soybean futures settled 5¼¢ higher at $10.39¼; November soybean futures settled 6¢ higher at $10.34¾.

July wheat futures ended 14¾¢ higher at $4.99.

July soy meal futures closed $4.20 per short ton higher at $380.50. July soy oil futures closed 0.21¢ lower at 31.06¢ per pound. 

In the outside markets, the NYMEX crude oil market is 34¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 59 points higher.

CORY BRATLAND, Kluis Commodities’ chief grain strategist, says the corn market is stronger on weather maps looking cool and wet in the six- to 10-day and the 11- to 15-day forecasts.

“Strong export demand the past few weeks has helped push corn basis firmer, and there is still some concern in the marketplace we will actually get the 88 million corn acres planted. So, the market needs to try and build in some risk premium,” Bratland says.

Wheat market is pushing higher on continued talks of poor crop conditions, and the rains in the wheat areas of the Southern Plains were a bit disappointing over the past five days, he says.

“Soybean prices are a bit of a head scratcher, but there are some talks around the industry that the U.S. and China will get all their issues resolved and not much of any soybean tariffs will be in place. Also, global demand is still very strong and the actual size of the South American crop is still unknown. With Argentina buying beans and meal from the U.S., this has the market feeling they are a bit shorter on beans than previous thought,” Bratland says. 

U.S. ethanol production averaged 985,000 barrels per day (b/d)—or 41.37 million gallons daily—down 25,000 b/d from the prior week, according to EIA data analyzed Wednesday by the Renewable Fuels Association.
 
“This is the first time in 15 weeks that production settled below 1 million b/d, dipping to the second-lowest output in 80 weeks,” the RFA stated in a press release.
 
As a result, the four-week average for ethanol production receded to a 27-week low of 1.016 million b/d for an annualized rate of 15.58 billion gallons.
 
Despite the cut in output, stocks reversed their five-week fall with a 1.9% increase over last week to 21.7 million barrels, the RFA release stated.

 

 

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets end higher.

Yesterday’s USDA Crop Progress Report indicated the corn planting pace continues to fall further behind.

At the close, the July corn futures finished 2½¢ higher at $3.90; December futures closed 2¼¢ higher at $4.06½.

July soybean futures settled 1¾¢ higher at $10.34; November soybean futures ended ½¢ higher at $10.28¾.

July wheat futures finished 9¾¢ higher at $4.84¼.

July soy meal futures closed 10¢ higher at $376.30. July soy oil futures closed 0.03¢ lower at 31.27¢ per pound. 

In the outside markets, the NYMEX crude oil market is 87¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 570 points lower.

Michael Rusch, regional sales director, ag/gommercial at Stewart-Peterson, says corn exports are strong, and Argentina was a soybean buyer, ending a string of two weeks since we’ve seen a morning bean export sale announcement from USDA, Rusch says.

He adds, “Also helping prices is money flowing into commodities at the moment, and concerns over Chinese tariffs on beans are still a concern. Both corn and beans are midrange, so depending on how planting goes, we have room to move before breaking any major support or resistance.”

On Tuesday, private exporters reported to the USDA export sales of 130,000 metric tons of soybeans for delivery to Argentina. Of the total, 60,000 metric tons are for delivery during the 2017/2018 marketing year, and 70,000 metric tons are for delivery during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets ended mostly lower.

At the close, the July corn futures finished 2¢ higher at $3.87; December futures ended 1¾¢ higher at $4.04.

July soybean futures closed 8¢ lower at $10.32; November soybean futures finished 6¢ lower at $10.28.

July wheat futures closed 2¾¢ lower at $4.74½.

July soy meal futures settled $2.40 per short ton lower at $376.20. July soy oil futures finished 0.26¢ lower at 31.30¢ per pound. 

In the outside markets, the NYMEX crude oil market is 38¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 84 points lower.

This afternoon’s USDA Crop Progress Report is expected to show corn planting nationwide at about 5% complete.

“That is down from 17% last year and the five-year average at 18% planted,” Al Kluis of Al Kluis Commodities stated in a daily note to customers.  

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