Soybeans close at $14 per bushel level, corn drops Tuesday

USDA ending stocks estimates come in above the trade’s expectations.

On Tuesday, the CME Group’s farm markets diverged, with soybeans reacting positively to the USDA Report.

At the close, the March corn futures finished 7¢ lower at $5.56¾. May corn futures settled 7¼¢ lower at $5.54½. New-crop December corn futures closed 2½¢ lower at $4.55¾. 
 
March soybean futures finished 14¼¢ higher at $14.01¾. May soybean futures ended 12¾¢ higher at $13.98¾. New-crop November futures are 11¢ higher at $11.90¾.

March wheat futures settled 6¾¢ lower at $6.49½. 

March soymeal futures finished $2.10 short term higher at $438.70.

March soy oil futures closed 0.89¢ higher at 46.52¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.46 per barrel higher (+0.79%) at $58.43. The U.S. dollar is lower, and the Dow Jones Industrials are 44 points higher (+0.14%) at 31,430 points.

Jack Scoville, PRICE Futures Group, says that the report was negative to expectations for corn, in line and showing a very tight situation for beans, and better than expected for wheat.

“Wheat is down anyway with weakness in the other markets. Prices are suffering especially in corn after the report, but I don’t think it will last too long as the situation remains bullish and USDA might have to adjust for more demand and less ending stocks. The beans data is bullish as the situation there is super tight and beans have strength for now. The corn should rebound in another day or two, I think. The demand has been very good,” Scoville says.

Al Kluis, Kluis Advisors, says that investors expect a bullish USDA report today. 

“On Monday, the grain markets closed sharply higher with corn again hitting new contract highs. So much for my thought of quiet markets ahead of today’s USDA reports,” Kluis stated in a daily note to customers.

Kluis added, “First for corn, the reports today will show an increase in corn exports, and cuts in ethanol and feed usage. For soybeans, the USDA will increase exports and crush, and take ending stocks lower. Watch the USDA projections. Even more important, watch the market reaction. A lot of bullish news is built into the current price of corn and soybeans. Will it hold up?”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets take part in the widespread buying activity.

At the close, the March corn futures finished 15¼¢ higher at $5.63½. May corn futures closed 14¢ higher at $5.62. New-crop December corn futures finished 6½¢ higher at $4.58¼. 
 
March soybean futures closed 21¾¢ higher at $13.87¾. May soybean futures ended 20¼¢ higher at $13.86. New-crop November futures settled 18½¢ higher at $11.79½.

March wheat futures ended 14½¢ higher at $6.55¼. 

March soymeal futures finished $6.10 short term higher at $436.60.

March soy oil futures settled 0.97¢ higher at 45.63¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.00 per barrel higher (+1.76%) at $57.85. The U.S. dollar is lower, and the Dow Jones Industrials are 138 points higher (+0.45%) at 31,287 points.

Britt O’Connell, ever.ag, says that the markets are off to the races to start the week.  

“The stock market is up and the dollar is down with details on the next round of stimulus cash driving outside markets. Undoubtedly, grains have borrowed some strength from that front as well as continued struggles in the South American harvest.  Beans in Monto Grosso were estimated at 11% harvested vs. the five-year average of 33%. Naturally, this delays the Safhrina corn crop planting, 8% planted vs. the 29% historically,” O’Connell says.  

O’Connell added, “Right now the world (namely China ) wants all the grain it can get.  Delays and shortages, either real or perceived, are going to throw gasoline on the fire that is grains. Tomorrow we have our monthly WASDE report from the USDA.  Traditionally, February doesn’t carry with it much fanfare, but given the tight balance sheets, any revision lower is dramatic,” O’Connell says.

Al Kluis, Kluis Advisors, says that the markets are readying for USDA’s report tomorrow. 

“On Friday, corn and soybeans closed lower, with wheat higher in a choppy day of trade. It looks like a quiet couple of days ahead of the USDA report on Tuesday,” Kluis stated in a daily note to customers.

Kluis added, “The strength in the U.S. and global stock markets is a positive long-term signal for economy and commodity demand. I am watching the export sales report each week to see if and when we start to see any slowdown in export demand.”

David Tolleris, WxRisk.com, reports that favorable rain fell in South America, over the weekend. “Several fronts brought heavy rain across many areas of central and southern Brazil over this weekend. Some additional rain was reported in northern Argentina and Paraguay,” Tolleris stated in a note to Kluis Advisors’ customers.

The week two forecast and beyond brings back a drier weather pattern, Tolleris says.

“This week, dryness continues in much of Argentina with warm, dry conditions again in the forecast for later this month in much of Argentina,” Tolleris stated in the note to Kluis Advisors’ customers.

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