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Soybeans Drop 16¢ Friday

Corn market dips, too.

DES MOINES, Iowa -- The U.S.-China trade dispute settlement rumors from yesterday, have turned out to be just rumors, as the CME Group’s soybean market drops Friday.

At the close, the July corn futures finished 1¾¢ lower at $4.06. December futures finished 1¼¢ lower at $4.21.

July soybean futures closed 16½¢ lower at $10.36¾.  November soybean futures settled 12¼¢ lower at $10.37.

July wheat futures finished 11¾¢ lower at $5.26.

July soy meal futures ended $4.90 per short ton lower at $393.70. July soy oil futures closed 0.04¢ lower at 30.77¢ per pound. 

In the outside markets, the NYMEX crude oil market is $1.29 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 389 points higher.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says that corn is holding up real well. 

“Corn prices, though lower, are holding due to the weather problems with the Brazilian safrinha crop, the chances for losses there, and more demand for U.S. corn,” Scoville says. 

Wheat is caught in a buy-the-rumor-and-sell-the-fact situation, after the Kansas tour results.

Soybeans are reacting to the non-news from China, he says. 

“No trade deal between the U.S. and China just yet, but they are still talking. We ran up yesterday on news stories that a deal was coming. Although that did not happen, there seems to be room for optimism right now. But that is a later story and for now most of our export demand should shift south for seasonal reasons,” Scoville says.



Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets turn mostly higher.

At the close, the July corn futures are 3¢ higher at $4.08; December futures finished 2½¢ higher at $4.22¼.

July soybean futures closed 10¼¢ higher at $10.53¼; November soybean futures ended 8¾¢ higher at $10.49½.

July wheat futures closed 11¼¢ higher at $5.38.

July soy meal futures settled $2.10 per short ton lower at $398.60. July soy oil futures ended 0.21¢ higher at 30.81¢ per pound. 

In the outside markets, the NYMEX crude oil market is 60¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 34 points higher.

Michael Rusch, regional sales director ag/commercial at Stewart-Peterson, says today’s markets were moving on the latest crop estimates by Informa, the private analyst firm. Also, some short-covering is believed to be underpinning corn.

“Regarding today’s markets, maybe short covering occurring, with the close above last summer’s high on the continuous chart for corn,” Rusch says. 

Rusch adds, “Elwynn Taylor, the well-respected meteorologist from Iowa State is calling for 70% change of lower than trend line yields this summer. Lower yields with current acres and current demand spells much smaller ending stocks.”

Informa estimated U.S. 2018 winter wheat crop near 1,163 million bushels vs. 1,269 last year; the HRW crop at 617 million bushels vs. 750 last year; and the Kansas crop at 241 million bushels vs. 334 last year. The SRW crop is estimated at 319 million bushels vs. 292 million a year ago.

Informa lowered World 2018 corn crop 1 mmt due to lower Ukraine crop, but raised world 2018 wheat crop 2 mmt, due to higher Russia crop. The firm raised Brazil soybean crop 1 mm to 117 and lowered Argentina 1.5 mmt to 37.5.

On Thursday, the USDA released its Weekly Export Sales Report showing corn, soybean, and wheat sales all falling within trade expectations.

  • Corn: 1.068 million metric tons (mt) vs. the trade’s expectations of between 550,000 and 1,100,000 mt
  • Soybeans: 886,200 mt vs. the trade’s expectations of between 300,000 and 1,100,000 mt
  • Wheat: 445,100 mt vs. the trade’s expectations of between 300,000 and 650,000 mt
  • Soybean meal: 307,200 mt vs. the trade’s expectations of between 150,000 and 300,000 mt

Separately, private exporters reported to the USDA export sales of 30,000 metric tons of soybean oil for delivery to Peru during the 2017/2018 marketing year.

The marketing year for soybean oil began October 1.



Wednesday’s Grain Market Review

Kansas City wheat closed higher on Wednesday, while Chicago wheat finished modestly lower. 

The price of hard red winter wheat, which used to be traded at the now-defunct Kansas City Board of Trade, rose as the Kansas Wheat Tour makes its way south on its second day. A report on what participants found will be released later this evening. 

Scouts including producers, analysts, and agronomists said Tuesday they expect fields in the northwestern part of the state to yield about 38.2 bushels an acre. Many participants said that figure was likely too high, but Dave Green with the Wheat Quality Council, the group that puts on the tour, said yields will depend on how much rain the area receives between now and harvest. 

Tour members likely saw worsening conditions as they drove south as extreme drought has enveloped much of the Southern Plains including southwestern Kansas and the Oklahoma and Texas panhandles. A couple of freeze scares also may have damaged crops. The adverse weather conditions are underpinning Kansas City wheat futures today.

Kansas City wheat futures for July delivery rose 2½¢ to $5.55½ a bushel in Wednesday trading on the Chicago Board of Trade. Chicago futures lost 2½¢ to $5.26¾ a bushel. 

Soybean futures, meanwhile, declined on Wednesday as investors have little hope that a U.S. delegation that includes Trade Representative Robert Lighthizer to China will make much headway in terms of finding a solution to an ongoing trade rift between the countries, analysts said. 

Jim Gerlach, the president of A/C Trading in Chicago, to Reuters that there's "some nervousness" among soybean traders. The U.S. has imposed tariffs on some countries' steel and aluminum and threatened to impose levies on $50 billion worth of Chinese goods. China retaliated, saying it would impose tariffs on an equal amount of U.S. goods including soybeans and pork. 

U.S. Commerce Secretary Wilbur Ross said yesterday that he hopes to find common ground with the Chinese and avoid tariffs on either countries' goods. 

Soybean futures for July delivery lost 10 3/4¢ to $10.42 1/2 a bushel in Chicago. Soy meal fell $4.80 to $399.60 a short ton, and soy oil futures gained 0.28¢ to 30.61¢ a pound. 

Corn futures declined 1/4¢ to $4.05 1/2 a bushel.


Tuesday’s Grain Market Review

Wheat futures jumped Tuesday on reports that adverse weather has stunted the U.S. hard red winter wheat crop.

The annual Kansas Wheat Tour kicked off this morning from Manhattan, Kansas, and some of the 94 participants assessing wheat fields found that cool, dry weather since emergence has slowed plant growth. Others are concerned they’ll find even worse fields in the next two days as the event continues. 

Dave Green of the Wheat Quality Council, the group that puts on the tour, told he doesn’t believe plants in the northwestern part of the state are facing a dire situation just yet. Conditions haven’t been ideal, but there’s still time for plants to improve if they see some precipitation.

“The wheat looks healthy, but it’s short,” Green said. "The cold weather is causing problems. There’s still a chance that it could be a really good crop, but it better start raining." 

The northwestern quadrant of Kansas, the biggest grower of winter wheat in the U.S., is the part of the state that’s received the most rain, so crops in the region have the best chance of coming out at or above historical averages, he said.

Some reports from fields indicated that the crop was in fairly bad shape, but in his opinion, plants at this point aren’t far enough along to make that determination, Green said. Without rain, fields in the area will yield 20 bushels an acre, but if precipitation makes its way to the ground in the next month, growers could see 50 bushels an acre in that part of Kansas, he said. A similar situation was developing in 2016, but rain fell throughout May and crop yields finished above average in many areas, he said. 

“It’s a pretty wide range of possibilities this late in the season,” he said. 

Wheat for July delivery on the Chicago Board of Trade jumped 18¼¢ to $5.28¾ a bushel, and Kansas City futures surged 15¢ to $5.52½ a bushel. 

Green said because of the severe drought farther south, he expects to see worse conditions as the tour meanders through southern Kansas counties and into the Oklahoma panhandle. 

Corn futures closed higher on continued forecasts for precipitation in the central Midwest that may keep farmers out of fields.

Seeding of the grain was 17% complete as of Sunday, up from 5% a week earlier but well behind the prior five-year pace of 27%, according to the USDA. Also, 3% of the crop was emerged, half of the normal pace for this time of year, the USDA said in a report. Soybean planting, meanwhile, was 5% complete, on par with the average pace, the agency said. 

Severe thunderstorms are expected to start this afternoon in parts of Nebraska and Iowa, according to the National Weather Service. Forecasts are calling for strong winds, hail, and possibly tornadoes, the agency said in a report on Tuesday morning. Accuweather said in a report this week that the first stretch of dangerous storms will hit the central and southern Plains this week. The weather system will affect a wide stretch of land from Iowa to Texas, the forecaster said. 

While weather issues are fleeting week to week and sometimes day to day, outside factors are also underpinning prices and making investors sensitive to any fundamental news, said Tomm Pfitzenmaier,  president of Summit Commodity Brokerage in Des Moines. 

“With the projected decline in the 2018/2019 carryout, the crop problems we saw in Argentina this winter, the dry conditions in Brazil, and the expected decline in the U.S. planted acreage, we expect to see the markets as extra sensitive to any perceived production problems,” he said. 

Corn futures for July delivery rose 4¼¢ to $4.05 a bushel in Chicago.

Soybeans closed up 2¾¢ to $10.41¼ a bushel. 


Monday’s Grain Market Review

Corn futures closed higher on Monday amid forecasts for rain that likely will further delay planting in the central and northern Midwest. Soybeans finished lower.

Precipitation is forecast for parts of southeastern South Dakota, southwestern Minnesota, and northwestern Iowa, according to the National Weather Service. Parts of central and eastern Nebraska are also expected to see rain today. 

Strong winds are also expected, which will spread fires rapidly if they’re set along with blowing dirt and dust that could reduce visiblity, the NWS said in a report early Monday morning. Drivers on Interstate 80 and Highways 6 and 136 should use caution.

There’s an 80% chance of rainfall in eastern Nebraska and western Iowa Tuesday, Wednesday, and Thursday, according to the forecaster. 

About 5% of the U.S. corn crop was planted as of April 22, well behind the prior five-year average of 14%, according to the Department of Agriculture. The USDA will release its Weekly Crop Progress Report this afternoon. 

Corn futures for July delivery rose 2¼¢ to $4.00¾ a bushel on the Chicago Board of Trade. 

Soybean futures fell 7¾¢ to $10.48½ a bushel in Chicago. Soy meal futures lost $2.30 to $393 a short ton, and soy oil fell 0.05¢ to 30.68¢ a pound.

Wheat futures closed well higher on Monday amid worries about dry conditions in the Southern Plains. The area has seen little rain in at least the past six months. Some rain is in the forecast for the next few days, but the chances of precipitation are low, according to the National Weather Service. 

The annual Kansas Wheat Tour kicks off Tuesday morning as producers, analysts, government officials, and members of the media leave Manhattan, Kansas, to assess fields in northwestern counties and parts of extreme southern Nebraska. 

Chicago wheat for July delivery jumped 12¾¢ to $5.11¼ a bushel, while Kansas City futures gained 7¼¢ to $5.37¾ a bushel. 

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