A return to higher for Thursday’s corn, soybean markets

The markets recover based on tight supplies, analyst says.

On Thursday, the CME Group’s farm markets recover from steep losses overnight.

At the close, the March corn futures closed 6½¢ higher at $5.41. May corn futures closed 7¢ higher at $5.39¾. New-crop December corn futures closed 4½¢ higher at $4.52½. 
 
March soybean futures finished 13½¢ higher at $13.67½. May soybean futures ended 14¼¢ higher at $13.66¾. New-crop November futures settled 10¼¢ lower at $11.74¼.

March wheat futures finished 2¢ lower at $6.33½. 

March soymeal futures settled $6.60 short term higher at $428.90.

March soy oil futures closed 0.06¢ lower at 45.63¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.63 per barrel lower (-1.07%) at $58.05. The U.S. dollar is lower, and the Dow Jones Industrials are 97 points lower (-0.31%) at 31,340 points.

Bob Linneman, Kluis Advisors, says that the markets have made a comeback from sharply lower overnight trading.  

“The big news on Wednesday was the USDA announcement of a 132,000-metric-ton corn cancellation by Unknown. This amount is small compared with the business done last week alone. However, traders are concerned this could continue to happen. Corn and soybean bears have been waiting for news like this so they can make an aggressive push lower. Further indicators will need to suggest the commercial market is concerned about any more cancellations before there would be a major change in supply-and-demand picture. The spreads will be a key indicator to watch alongside basis,” Linneman stated in a daily note to customers.

Linneman added, “Soybeans traded over 70¢ off the high from Tuesday during the overnight trade. With a 120-million-bushel carryout and stocks-to-use ratio at 2.61% (which is less than 10 days worth of U.S. needs), we have to wonder how declining prices will ration the remaining U.S. supply.”

Separately, the USDA’s Weekly Export Sales Report Thursday shows very strong demand figures for corn and soybeans.

  • Corn = 1.46 million metric tons (mmt.) vs. the trade expectations of 1.0 to 1.8 mmt. 
  • Soybeans = 983,200 mmt. vs. the trade’s expectation of 350,000 to 1.0 mmt.
  • Wheat = 635,400 mt. 
  • Soybean meal = 264,700 mt.
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