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Grains, Beans Close Mixed Friday as Investors Weigh Demand, Inventories

USDA Reports Export Sales to China, Costa Rica.

Grains and soybeans finished mixed on Friday as investors weighed demand news against rising inventories, which continue to pressure prices. 

The U.S. Department of Agriculture reported export sales of corn, beans, and wheat this morning. Exporters sold 257,000 metric tons of soybeans for delivery to China and 126,000 tons to unknown buyers. Sales of 134,503 tons of corn to Costa Rica also were reported along with a 130,000-ton purchase of soft-red winter wheat to unknown buyers. 

Still, sales since the start of the marketing year on September 1 for corn and soybeans and June 1 for wheat are down from year-ago levels, according to the USDA. 

Stockpiles also are weighing on prices. 

Corn inventories on August 31 will total 2.437 billion bushels, the USDA said in a report earlier this week. While that’s down by 50 million bushels from a prior projection, it’s up from 2.295 billion a year earlier. 

Soybean stockpiles are pegged at 445 million bushels, above the month-ago estimate of 425 million and well above the year-earlier total of 301 million bushels, government data show. 

Trading volumes are expected to be light through at least the end of the year barring a black swan event as the so-called holiday trade has set in. 

Corn futures for March deliver fell 1¼¢ to $3.47¼ a bushel on the Chicago Board of Trade. 

Soybean futures for January delivery gained ¾¢ to $9.68½ a bushel. Soymeal futures lost $1 to $320.60 a short ton, and soy oil added 0.03¢ to 33.21¢ a pound. 

Wheat for March delivery rose ¼¢ to $4.18½ a bushel in Chicago. Kansas City futures fell ½¢ to $4.17¾ a bushel.

In outside markets, the dollar added 0.5% against a basket of global counterparts, which capped commodity prices. Stock indexes including the Dow Jones Industrial Average and the S&P 500 were higher in late-day trading. 

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Thursday’s Grain Market Review

Soybeans closed lower Thursday on forecasts for rainfall in parts of Argentina while wheat gained.

Growing areas in the South American country have been dry for weeks, but rain has been added to weather forecasts starting this weekend.

Light showers are expected in eastern Argentina’s corn and soybean belts. As much as an inch of rain will offer temporary relief with northern areas receiving more precipitation, Commodity Weather Group said. There’s a chance for wetter weather on Saturday in southern Santa Fe and early next week for central Argentina. 

Wheat futures, meanwhile, are being helped by concerns about cold, dry weather in the southern Plains. There’s risk of winterkill in some areas where plants don’t have a protective layer of snow, and red flag warnings are in effect due to extremely low humidity and strong winds, the National Weather Service said. 

Technically, wheat markets have taken a slightly bullish tone, analysts said. 

“Wheat has posted the first higher high in the past eight sessions this morning, which may not be account for much, but it is a step in the right direction,” said Dan Hueber, the head of The Hueber Report in Sycamore, Illinois. “Daily indicators are oversold and beginning to show signs of curving higher but nothing that would confirm a turn quite yet. A few days of sideways chop in this $4.10- to $4.20-zone would be desirable.”

Trading is expected to be light from now through the end of the year, as is expected around the holidays. 

Soybean futures for January delivery closed down 12¢ to $9.67¼ a bushel on the Chicago Board of Trade. Soymeal declined $5.60 to $321.20 a short ton, and soy oil futures lost 0.02¢ to 33.19¢ a pound. 

Corn futures lost ¼¢ to $3.48¾ a bushel in Chicago. 

Wheat for March delivery gained 2¢ to $4.18¾ a bushel in Chicago while Kansas City futures added 2¢ to $4.18¼ a bushel. 

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Wednesday’s Grain Market Review

Corn and soybeans closed higher on Wednesday after the USDA lowered its outlook for corn stockpiles and as dry weather persists in Argentina.

The USDA in its monthly World Agricultural Supply and Demand Estimates (WASDE) Report on Tuesday said corn inventories at the end of the marketing year on August 31 will total 2.437 billion bushles, down from 2.487 billion forecast a month ago and well below analyst estimates for 2.478 billion bushels. The government expects ethanol producers to use more of the grain in the 2017-2018 marketing year. 

While that underpinned corn prices, continued dry weather in Argentina propped up soybeans. 

Little to no rainfall is expected at least the rest of this week in the South American country, forecasters said. Some rain, however, is in the forecast starting next week. 

The USDA report yesterday was mostly uneventful and came in near expectations. The soybean inventories outlook was raised to 445 million bushels by the agency, topping last month’s forecast for 425 million bushels and above the consensus for 438 million bushels. While investors seem to be focused on weather in Argentina, the increased inventories projection likely will keep prices capped. 

Corn futures for March delivery added 1¼¢ to $3.49 a bushel on the Chicago Board of Trade.

Soybean futures for January delivery rose 3½¢ to $9.79¼ a bushel. Soy meal gained $1.90 to $326.60 a short ton, and soy oil fell 0.27¢ to 33.18¢ a pound.

Wheat futures finished the session higher as Commodity Weather Group called for increased winterkill risk for U.S. crops in the next 11 to 20 days. 

Chicago wheat gained 5½¢ to $4.16¼ a bushel, while Kansas City futures added 4¼¢ to $4.15½ a bushel on Wednesday. 

In outside markets, the Federal Reserve raised its federal funds rate by 25 basis points to a target of 1.25% to 1.5%. The increase will boost borrowing rates on large-ticket items like real estate and equipment. 

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Tuesday’s Grain Market Review

Corn and soybeans closed lower on Tuesday on slack demand and a World Agricultural Supply and Demand Estimates (WASDE) Report that came out as expected. 

The USDA said corn stockpiles at the end of the marketing year will total 2.437 billion bushels, down from 2.487 billion forecast last month. The USDA raised its outlook for the amount of the grain used to make ethanol by 50 million bushels. 

Soybean inventories were pegged at 445 million bushels, up from November’s outlook for 425 million bushels, according to the USDA. Exports were lowered by 25 million bushels but that was partially offset as the agency raised its forecast for seed use by 5 million. 

Fundamentally, little has changed in recent days. Rain fell in growing areas of Brazil, which will probably boost crop prospects in the South American country. In Argentina, it’s still dry, but some precipitation is on the way, according to weather forecasts. 

Prices originally followed suit – corn rose right after the report was released while soybeans declined. As the session wore on, however, the weak demand so far this marketing year began to weigh on futures. Overall, the report came out as expected, giving traders little impetus to buy contracts, analysts said.  

“It really was a ho-hum report and the market is taking it as a ho-hum report,” said Brian Grossman, a market strategist at Zaner Group in Chicago.

Corn futures for March delivery fell 1¢ to $3.48 a bushel on the Chicago Board of Trade. 

Soybeans for January delivery fell 6¼¢ to $9.76¼ a bushel in Chicago. Soy meal futures declined $3.50 to $324.20 a short ton, and soy oil was unchanged at 33.46¢ a pound.

Chicago wheat lost 2¢ to $4.11½ a bushel, while Kansas City futures dropped 1¢ to $4.11¾ a bushel. 

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Monday’s Grain Market Review

Grains and soybeans closed lower on Monday amid improving weather conditions in Brazil and as investors square positions ahead of tomorrow’s World Agricultural Supply and Demand Estimates (WASDE) Report.

Weekend rainfall favored much of northern Brazil and more showers are expected to fall this week, Commodity Weather Group said in a report on Monday. Drier areas in the south are forecast to get rain in the next six to 15 days. 

The rainfall in Brazil likely will boost corn and soybean development, the forecaster said. 

In the U.S., cold weather in the Midwest raises the risk of winterkill, but snow will protetct wheat in the Northern Plains and the northern Midwest.

Prices also are drifting lower ahead of tomorrow’s WASDE Report from the USDA. Analysts said they expect slight reductions in stockpiles for corn but an increase in soybean inventories compared with month-ago estimates. 

Corn futures for March delivery fell 3¢ to $3.49¾ a bushel on the Chicago Board of Trade. 

Soybeans for January delivery lost 7¼¢ to $9.82½ a bushel in Chicago. Soy meal futures declined $4.10 to $327.60 a short ton, and soy oil dropped 0.21¢ to 33.41¢ a pound.

Chicago wheat dropped 5¢ to $4.14 a bushel, while Kansas City futures lost a nickel to $4.13 a bushel. 

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