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Farm Markets Rally Tuesday

A Turnaround Tuesday

DES MOINES, Iowa -- On Tuesday, the CME Group’s farm futures markets staged a late-session rally, impressing traders.

The trade is eyeing Friday’s USDA Quarterly Grain Stocks Report, which is expected to show corn stocks as of September 1 at 1.75 billion bushels and soybean stocks at 201 million bushels. If realized, both estimates would be seen as bearish for the market.

Yet, the commodities found buyers late in the day, according to Don Roose, U.S. Commodities in West Des Moines, Iowa. “The harvest is under way, but that doesn't mean farmers are selling crops right away,” Roose says. “The old-crop prices tightened with new-crop premiums, helping boost prices. There is demand for our products that remains as a strong fundamental under the market.”

For instance, Morroco buys U.S. wheat this week, and China keeps buying U.S. soybeans. All of this is helping corn, Roose says.

“Now, the big crop ideas are keeping rallies in check.”

At the close, the December corn futures finished 2¾¢ higher at $3.31¾, and March futures closed 2¾¢ higher at $3.41¾ per bushel.

November soybean futures finished 7¼¢ higher at $9.52½; January soybean futures closed 7¼¢ higher at $9.58¾.

December wheat futures ended 8¢ higher at $4.04.

December soy meal futures closed $2.00 a short ton higher at $299.60. December soy oil futures closed unchanged at 33.35¢ per pound. 

In the outside markets, the Brent crude oil market is $1.27 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 125 points higher.

Peter Meyer, PIRA Energy grain analyst, says that the markets seem to be unsure of themselves.

“The markets seem confused, as we await the Quarterly Stocks report this week and the October WASDE,” Meyer says.  

Soybean export demand remains good, but it’s getting harder and harder to ignore these yield reports, Meyer says.  

“A national soybean average yield of 52 bushels per acre must be in the discussion, at this point. The issues with soybeans are the yields as well as the fact that we’re hovering around the lows with only 10% of the harvest complete, which is not a great combination,” Meyer says.  

He adds, “Yesterday’s break of $300 per short ton, in December meal, is of concern as well as the meal market seemingly oversupplied.”

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