Soybeans Fall 6¢ Thursday

Pre-holiday trading dips

DES MOINES, Iowa -- On Thursday, the CME Group's farm markets remain lower.

At mid-session, the March corn futures are 3/4¢ lower at $3.46.

January soybean futures are 6¢ lower at $10.00, while March soybean futures are 6 1/4¢ lower at $10.10.

March wheat futures are 1 1/2¢ lower at $3.98.

January soy meal futures are $0.20 short ton higher at $313.80. January soy oil futures are $0.57 lower at 35.77¢ per pound. 

In the outside markets, the Brent crude oil market is $0.41 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 49 points lower at 19,900.

Jason Roose, U.S. Commodities grain analyst, says a selling mentality has set in on the soybean market.

“The soybean market is continuing its risk off trade today with favorable weather in Brazil and Argentina as production estimates grow . A potential slow down in Chinese bean purchases is also adding to the long liquidation,” Roose says.

The USDA released its Weekly Export Sales Report Thursday. Soybeans beat, corn fell within the street's expectations.

  • Wheat= 297,800 metric tons vs. the trade’s expectations of between 350,000-600,000 metric tons,
  •  
  • Corn= 1.25 million mt. vs. the trade’s expectations of between 700,000-1,600,000 metric tons,
  •  
  • Soybeans= 1.81 million mt. vs. the trade’s expectations of 1,300,000-2,000,000 metric tons
  •  
  • Soybean meal = 139,200 mt vs. the trade’s expectations of 125,000-275,000 metric tons.

Separately, the USDA announced fresh export sales Thursday.

Private exporters reported to the U.S. Department of Agriculture export sales of 100,400 metric tons of corn for delivery to Mexico during the 2016/2017 marketing year.

The marketing year for corn began Sept. 1.

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Wednesday's Grain Market Review

On Wednesday, the CME Group’s soybean market ended at its daily low, with flat trading being the theme.

At the close, the March corn futures settled 3¢ lower at $3.47 1/4.

January soybean futures finished 1 1/2¢ higher at $10.06 3/4, while March soybean futures closed 1 1/4¢ higher at $10.17.

March wheat futures ended 3 3/4¢ lower at $3.99 1/2.

January soy meal futures finished $0.70 short ton higher at $309.50. January soy oil futures closed $0.02 higher at 36.04¢ per pound. 

In the outside markets, the Brent crude oil market is $0.81 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 17 points lower at 19,956.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says that the market is dead today.  

“There wass a little pop when the China sale was announced. But, really all I see people doing is taking money off the table. I kind of feel that this will be the trend through Friday. People sitting back and watching and not doing much trading,” Scoville says.

Bob Linneman, Kluis Commodities, says the soybean market now faces fundamental and technical pressures that could cap upside movement.

“As the long holiday weekend approaches, will fund managers want to risk holding long soybean positions now that the chart has turned bearish?” Linneman posed in a daily letter to customers Wednesday.

On Wednesday, private exporters reported to the U.S. Department of Agriculture export sales of 132,000 metric tons of soybeans for delivery to China during the 2016/2017 marketing year.

The marketing year for soybeans began September 1.

 

 

 

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Tuesday Review of Grain Markets

Tuesday, the CME Group’s soybean market fell under the pressure of a sell-off and favorable South American crop weather.

At the close, the March corn futures closed 3¢ lower at $3.50¼.

January soybean futures finished 16¼¢ lower at $10.05¼, while March soybean futures finished 16¼¢ lower at $10.15¾.

March wheat futures closed 1¾¢ lower at $4.03¼.

January soy meal futures ended $3.40 short ton lower at $308.80. January soy oil futures settled 0.50¢ lower at 36.06¢ per pound. 

In the outside markets, the Brent crude oil market is 16¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 71 points higher at 19,954. As of this writing, the Dow had not reached its record high of 20,000. But, NASDAQ did hit a new all-time record.

DeAnna Hawthorne-Lahre, StatFutures cofounder and trader, says the soybean market is giving back its early December gains.

“The soybean market is eroding from big rally the past few weeks,” Hawthorne-Lahre says.

“The worst-kept secret among pros is the funds being long a big unit of beans and short units of corn and wheat. Informa dropped the big one on the bean longs when it forecasted a 89+ million-acre bean crop next year,” she says.

In addition, the rains hitting the Argentina’s crops to alleviate any dry concerns, she says.

“Wheat is stiff on the break, as the arctic blast out on the High Plains has sparked conversations of winterkill, keeping bears at bay. The protein still driving wheat inter-market internals, as well. End-users are paying edges to deliver grains before new years, indicating to me that we will have movement in early January under the new tax regime,” Hawthorne-Lahre says.

 

 

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Monday Review of Grain Markets

On Monday, the CME Group’s farm futures prices closed about where they opened; lower, despite fresh export sales announced by the USDA.

At the close, the March corn futures settled 3¢ lower at $3.53¼.

January soybean futures finished 15¼¢ lower at $10.21½, while March soybean futures closed 14¾¢ lower at $10.32.

March wheat futures finished 4¼¢ lower at $4.05.

January soy meal futures finished $4.90 short ton lower at $312.20. January soy oil futures closed 0.18¢ lower at 36.56¢ per pound. 

In the outside markets, the Brent crude oil market is 16¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 45 points higher.

On Monday, private exporters reported to the U.S. Department of Agriculture the following activity:

  • Export sales of 264,000 metric tons of soybeans for delivery to China during the 2016/2017 marketing year.
  • Export sales of 128,000 metric tons of corn for delivery to Japan during the 2016/2017 marketing year.

The marketing year for corn and soybeans began September 1.

Alan Brugler, president of Brugler Marketing & Management LLC, says that the soybean market is taking back last week’s profits.
“Not sure if this is really much of a sell-off in the beans. Still in the upper Bollinger channel, above the 40-day average. Mostly just reversing Thur-Fri action,” Brugler says.

He adds, “The market is getting dragged down by the rain in Argentina, Brazil’s SAFRAS hiking projected Brazilian crop to 106.1 MMT, and weakness in both soy oil and soy meal.”

Dustin Johnson, senior strategist for AgYield/EHedger, says the lower market is just one more weekend past without a South American crop-weather event arriving,” Johnson says.

Accumulated export soybean sales are running 4% above where the U.S. should be on the five-year average pace of the WASDE estimates.

“This means if sales continue on this pace for the remainder of the marketing year, add roughly 80 million bushels of total soybean demand,” Johnson says.

Johnson adds, “Leftover carryout is still very abundant, even with the demand. Therefore, I think it has to come down to a South American weather problem for this rally to continue, and every weekend that it doesn’t is critical.”

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