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Corn, soybeans, wheat close lower | November 18, 2021

A day for profit taking

At the close Thursday, CME Group corn and soybeans ended lower.

Dec. settled 2¼¢ lower at $5.73. March futures ended 2¼¢ lower at $5.79¼. May corn futures closed 2¢ lower at $5.83¾.

January soybeans finished 11¾¢ lower at $12.65¼.

March soybean futures closed 11¾¢ lower at $12.76½. May soybean futures settled 10¾¢ lower at $12.85¾.

Dec. wheat futures finished 2¼¢ lower at $8.20.

Dec. soymeal futures closed $4.30 per short ton lower at $370.40.

Dec. soy oil futures settled 0.06 cent lower at 59.17¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.78 higher (+1.00%) at $79.14. The U.S. dollar is lower, and the Dow Jones Industrials are 55 points lower  (-0.15%) at 35,875 points.

Don Roose of U.S. Commodities attributes part of today’s retrenchment to profit taking. 

Over the past few weeks soybeans have been recovering from a quarterly USDA stocks report on September 30 that showed an unexpected 88 million bushels.  Since that report, “I think we went to top of the range chartwise,” Roose says.

The market has slowly been retracing a loss of about 95 cents/bushel in beans, Roose says.

“Now we’re back up to the level of that loss and we’ve stalled out,” he says.

Part of the recent uptick in corn and soybeans prices has been driven by what Roose calls inflation buying. Speculators have been buying futures with the expectation that their dollars won’t go as far later.

In spite of today’s lack of excitement in futures, “there’s solid demand underneath the market,” Roose adds. Ethanol margins are at a record high and the soybean crush margin is running at $2 to $2.50 a bushel, he says.

Wheat, too, is supported by demand, with world stocks at historically low numbers, he says, and with Russia, the world’s largest wheat exporter, raising its export tax on wheat. 

Early this morning, the USDA released weekly exports sales. Net sales of corn for 2021/2022 were 904,600 metric tons versus trade expectations of 800,000 MT to 1.4 million metric tons. (USDA also reported 2022/2023 net new-crop sales  of 140,000 MT for Mexico.)

Net sales of soybeans at 1,382,700 MT were near the middle of the trade outlook for 1 MMT to 1.8 MMT. (USDA also reported a 2022/2023 net soybean sales reduction of 7,800 MT for Cuba.)

USDA also reported weekly wheat sales of 399,100 MT and net sales of soybean cake and meal of 183,000 MT.

USDA did not have a separate daily exports sales report today.

Just before trading began today, Bob Linneman of Kluis Commodity Advisors says, “Soybean futures are closing in on the 100-day average on the charts. We have not traded above that line for three months. We should not be surprised to see some profit-taking after testing this well-watched technical target.”

In a message to clients this morning, Linneman also adds: “Grain bulls are enjoying the recent run of friendly news. Wednesday morning was highlighted by reports that China made a sizable purchase of US soybeans, at the same time booking a smaller amount from Brazil. Hopefully we see that story confirmed in the daily export sales report today or tomorrow. My first thought regarding rallies driven by this kind of news: 'Buy the rumor, sell the fact.' However, soybean meal is trading at the highest level since early July. We are nearing upside resistance targets that may prove to be the turning point on those charts. Grain bulls are also starting to notice the early stages of potential change of trend to weather in areas of South America. We need to closely monitor those updated forecasts.” 

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