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Corn, Wheat Markets Move Higher Friday

Investors position themselves ahead of long holiday weekend.

DES MOINES, Iowa -- On Friday, the CME Group farm futures have the bulls and bears tugging at each end the rope, as the markets stay rangebound.

At mid-session, the July corn futures are 4 1/2¢ higher at $3.73, while December futures are 4 3/4¢ higher at $3.92.

July soybean futures are 6 3/4¢ lower at $9.32, November soybean futures are 5 3/4¢ lower at $9.33.

July wheat futures are 6 3/4¢ higher at $4.37. July soy meal futures are $1.60 per short ton lower at $303.10. July soy oil futures are $0.23 lower at 31.81¢ per pound. 

In the outside markets, the Brent crude oil market is $0.28 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 13 points lower.

Bryan Doherty, Stewart-Peterson grain analyst, says that the markets are mostly trading sideways, but a CFTC Report Friday and a long Holiday weekend ahead will have investors positioning themselves, today.

"According to the USDA weekly Crop Progress report released each Monday, this year’s corn crop is on schedule. The market believes so, with prices continuing to trend in a sideways price range, as it has since late fall. Yet, some farmers may disagree, especially those with saturated soils and little hope of planting soon, and those experiencing below-normal temperatures. They may argue that this is not last year (a record yield), and it is likely that maximum yield potential is on the decline," Doherty stated in a weekly review article

Doherty says that the market will keep a close eye on Friday afternoon's CFTC Report.

"The managed money invested in the corn market remains heavily short. There does not seem to be reason for funds to change positions if they trade numbers (planting progress) or technical indicators (charts)," Doherty stated in his weekly review article Friday.

He added, "Yet, if and when they do, a market rally is likely. Research indicates that, in years following record yields, there is a high probability of a price rally. Over 50% of the time, the rally comes in June, July, or August. Producers should recognize that in recent years, rallies have occurred, and then run out of gas near $4.50 December. With a large supply of corn left over from last year, a rally above $4.50 is not likely, however, not impossible," Doherty wrote.

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm futures markets finished weaker. For corn, fresh demand is helping to keep that market’s losses limited.

At the close, the July corn futures settled 2¢ lower at $3.69¼, and December futures finished 2¼¢ lower at $3.87½.

July soybean futures closed 8¾¢ lower at $9.39½; November soybean futures finished 8¾¢ lower at $9.32¼.

July wheat futures finished 1¾¢ lower at $4.30¾.

July soy meal futures closed $1.70 per short ton lower at $304.70. July soy oil futures settled 0.24¢ lower at 32.04¢ per pound. 

In the outside markets, the Brent crude oil market is $2.51 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 80 points higher.

Dustin Johnson, EHedger grain analyst, says that planting delays from rainy conditions have been the “bullish” story for corn.

“On the flip side, the large old-crop supply has been an albatross for the market. Those two story lines are what has kept corn in a tight range, in our opinion,” Johnson says.

However, as time goes on, the delayed planting may not be so much a “bullish” story for corn as it is a “bearish” story for soybeans, he says.

“As we head into a critical three-day weekend, this is likely a concern for many traders. July beans just took out 13-month lows. NOPA crush was well below expectations and the Brazilian real is still down sharply from a few weeks ago,” Johnson says.

On Thursday, private exporters reported to the U.S. Department of Agriculture export sales of 115,400 metric tons of corn for delivery to unknown destinations during the 2016/2017 marketing year.

The marketing year for corn began September 1.

Separately, the USDA Weekly Export Sales Report Thursday showed corn exports fell below trade expections, while soybean and wheat sales fell within.

  • Corn = 457,700 metric tons vs. trade’s expectations of between 600,000 and 1,200,000 mt.
  • Soybeans = 478,720 mt vs. trade’s expectations of between 300,000 and 650,000 mt.
  • Wheat = 544,800 mt. vs. trade’s expectations of between 300,000 and 700,000 mt.
  • Soymeal = 125,000 mt. vs. trade’s expectations of between 50,000 and 250,000 mt.

 

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets closed mostly flat to higher.

At the close, the July corn futures settled 1¾¢ higher at $3.71¼, while December futures closed 2¢ higher at $3.89¾¢.

July soybean futures finished unchanged at $9.48; November soybean futures closed ½¢ lower at $9.48.

July wheat futures closed 3¢ higher at $4.32½.

July soy meal futures ended 10¢ per short ton higher at $306.40. July soy oil futures closed 0.06¢ lower at 32.28¢ per pound. 

In the outside markets, the Brent crude oil market is 12¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 59 points higher.

Deanna Hawthorne-Lahre, StatFutures cofounder and trader, says each farm commodity market is facing something separate.

“Brazil’s corruption investigation has collapsed that country’s currency, sending waves over the bean market. Plus, volatility in beans is under 14% again and the markets, again, feel heavy,” Hawthorne-Lahre says.

For corn, there was an investor who put pressure on the market, with a big covered call sale, she says.

“No change of view in corn,” she says.

U.S. wheat crop protein levels are looking a tad weak coming out of the field.

“This is forcing a bit of a shift in the prices between the wheat markets such as Kansas and Chicago. The wheat needs some heat to finish it off. But we’re hearing whispers that the Kansas wheat crop could produce over 300 million bushels. This is no surprise to us old-timers, but rookies are getting a lesson on how tough wheat is. A trading range is still in place,” Hawthorne-Lahre says.

Mike North, Commodity Risk Management Group analyst, says the markets are stuck in a trading range.

“The general reality of the market is that participants are torn between a timely planting progress and potential quality issues. That sets the stage for sideways trade inside a range,” North says.

 

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets stay lower, as investors digest yesterday’s bearish USDA Crop Progress Report.

At the close, the July corn futures settled 5½¢ lower at $3.69½, while December futures closed 5¢ lower at $3.87¾.

July soybean futures finished 8¼¢ lower at $9.48¼; November soybean futures ended 7¾¢ lower at $9.48½.

July wheat futures finished 4¾¢ lower at $4.29½.

July soy meal futures finished $1.50 per short ton lower at $306.30. July soy oil futures finished 0.60¢ lower at 32.34¢ per pound. 

In the outside markets, the Brent crude oil market is 36¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 58 points higher.

Jason Roose, U.S. Commodities grain analyst, says that this week’s USDA Crop Progress Report is still pressuring the markets.

“The planting progress was above expectations with less precipitation in the forecast, lowering prices. Plus, the stronger dollar is also taking premium out of the market with the large world grain stocks putting a lid on any substantial rallies,” Roose says.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm futures finished the day's session stronger.

At the close, the July corn futures settled 2½¢ higher at $3.75, while December futures finished 2½¢ higher at $3.92.

July soybean futures closed 3½¢ higher at $9.56½, November soybean futures finished 4½¢ higher at $9.56¼.

July wheat futures closed 1¢ lower at $4.34¼.

July soy meal futures finished 80¢ per short ton higher at $307.80. July soy oil futures finished 0.10¢ lower at 32.94¢ per pound. 

In the outside markets, the Brent crude oil market is 48¢ per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 86 points higher.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says a weather-driven market is still focused on wet conditions and replanting of corn.

“Wet is the four-letter word. More rain over the weekend and forecasts for more this week have kept speculators doing some buying or at least not selling more,” Scoville says. 

For this afternoon’s USDA Crop Progress Report, the trade Ideas are that corn planted progress can be as much as 85%.

“Talk of big replanting to be done and talk of yellow crops keep ideas about condition highly variable,” Scoville says. 

“Soybean investors are seeing slow planting and no business at all from South America. Wheat is up on wet weather creating planting delays for spring and condition worries for winter.  So wet is pushing prices higher today in a moderate-volume day,” Scoville says.

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