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Corn, Soybeans Finish Slightly Higher Friday

End-of-month trading is quiet.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets closed mostly higher.

The March corn futures settled 3/4¢ higher at $3.52. May futures finished 1¢ higher at $3.60.

Jan. soybean futures closed 3/4¢ higher at $9.49.  March soybean futures ended  1 1/4¢ higher at $9.60.

March wheat futures closed 2 1/4¢ lower at $4.24.

March soy meal futures ended $1.40 per short ton lower at $316.70. March soy oil futures are 0.11 higher at 32.94¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.04 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 55 points lower.

Jason Roose, U.S. Commodities analyst, says that investors are skimming some profits today.

“Corn and soybeans are trading higher today on mild short covering with slow producer selling,solid export sales and a dry 11-15 day forecast for Brazil.

Roose adds, “Also, investors are position-trading and South America’s weather will dictate price direction the next few weeks with world grain stocks at a premium.”

Cory Bratland, Kluis Commodities broker, says that the soybean market continues to find very few friends these days.

“Solid soybean exports were not enough to light a fire under them. It just feels the funds want to liquidate their long positions before year-end to show some nice profits,” Bratland says.

He adds, “Can the bulls in the soybean complex wrestle the market away from the bears over the next two weeks? These could be some rather low-volume trading sessions.”

On Friday, the USDA announced fresh demand news for soybeans.

Private exporters reported to the U.S. Department of Agriculture export sales of 252,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year.

The marketing year for soybeans began Sept. 1.

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close mostly higher, after stronger-than-expected weekly sales.

At the close, the March corn futures settled 2¢ higher at $3.51. May futures finished 2¢ higher at $3.59.

January soybean futures settled 5¼¢ lower at $9.48¾. March soybean futures closed 5¼¢ lower at $9.59.

March wheat futures closed 3¢ higher at $4.27.

January soy meal futures ended $1.60 per short ton lower at $318.10. January soy oil futures closed 0.30¢ lower at 32.83¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.25 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 85 points higher.

On Thursday, the USDA weekly Export Sales Report showed that wheat and corn sales beat expectations.

  • Wheat: 833,200 metric tons vs. the trade’s expectations of between 300,000 and 600,000 mt
  • Corn: 1.56 million mt vs. the trade’s expectations of between 800,000 and 1,300,000 mt
  • Soybeans: 1.76 million mt vs. the trade’s expectations of between 1,000,000 and 2,100,000 mt
  • Soybean meal: 210,100 mt vs. the trade’s expectations of between 175,000 and 325,000 mt    

Jason Ward, Northstar Commodity managing director, says that the weakness in the soybean market is being caused by end-of-year liquidation of long soy/short corn/wheat spreads.

“But we could be seeing some new shorts entering due to ongoing beneficial growing conditions in Brazil for soybeans and some beneficial rains being seen in Argentina,” Ward says. “My weather contacts in Brazil/Argentina are calling this rainfall for Argentina the best rains in two months, but not enough to fully erase moisture deficits. We are hearing early soybean yields in Paraguay as poor, 10 to 15 bushels per acre.”
 
The corn and wheat markets Thursday are benefiting from solid export demand (2 weeks in a row for wheat) and likely short covering, he says.
 
“In the bigger picture, we are seeing something develop in the feed market worth mentioning. We are hearing large hog producers reducing DDGS in their rations and replacing it with more soybean meal and more corn. DDGS (due to high demand) have rallied to levels above corn that it is now financially beneficial to reduce it in the ration and increase meal/corn,” Ward says.
 
This can do one of two things or possibly both, he says.

“This could support the soymeal basis, which has been very weak due to record crush and relatively weak domestic demand. It could also reduce ethanol margins as high priced DDGS have been carrying margins. So, we could see weaker DDGS values in the months ahead, which would pressure ethanol margins,” Ward says.

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s corn and soybean markets closed mixed.

At the close, the March corn futures settled 1¾¢ higher at $3.49; May futures finished 1¾¢ higher at $3.57½.

January soybean futures finished 2¢ lower at $9.54; March soybean futures closed 2¼¢ lower at $9.64½.

March wheat futures ended 4¢ higher at $4.23.

January soy meal futures finished 50¢ per short ton higher at $315.70. January soy oil futures closed 0.26¢ lower at 33.13¢ per pound. 

In the outside markets, the NYMEX crude oil market is 52¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 17 points lower.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says the markets did have some buyers.

“There was some buying related to position squaring in the grains before the end of the year. People watching for demand news, none today, but soybean demand is certainly better, and China has been buying U.S. sorghum, a competing feed,” Scoville says. 

The weather is also a market factor, he says.

“The cold forecast with little or no snow cover in the Midwest and especially the Great Plains has shorts in a covering mode. Great Plains crops need some moisture. The dryness in southern Brazil and Argentina has been lessened but has not gone away and could return at any time during La Niña. This might become a bigger issue next year,” Scoville says.

 

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets can’t muster up much support.

At the close, the March corn futures settled ½¢ higher at $3.47½; May futures closed ½¢ higher at $3.55¾.

January soybean futures finished 5½¢ lower at $9.56; March soybean futures settled 5¾¢ lower at $9.66¾.

March wheat futures ended 1¢ lower at $4.19½.

January soy meal futures closed $3.30 per short ton lower at $315.20. January soy oil futures closed 0.21¢ higher at 33.39¢ per pound. 

In the outside markets, the NYMEX crude oil market is 33¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 13 points lower.

On Tuesday, the USDA announced fresh soybean exports.

Private exporters reported to the USDA export sales of 145,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year. The marketing year for soybeans began September 1.

Deanna Hawthorne-Lahre, StatFutures cofounder and trader, says investors are eyeing weather patterns.

“No change in market view and low trade volume are playing out, as I have seen for the past few months,” Hawthorne-Lahre says.

She adds, “The soybean business is keeping this whole farm market from collapsing. Corn and wheat markets are flatlined. The chit chat in my circles is about the La Niña weather pattern strengthening. We just watch to see if it can bring this thing to life.”

Otherwise, laying low in the market until the USDA’s January Seeding Report is Hawthorne-Lahre’s preference.

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Monday’s Grain Markets Review

Wheat futures closed higher on Monday on cold, dry weather in the southern Plains. 

Little to no rain has fallen in parts of western Kansas or the Oklahoma and Texas panhandles in the past 30 days, according to the National Weather Service. 

Extremely cold weather is forecast for the region next week, which increases the risk of winterkill for plants that have no protective layer of snow, though the severity of the cold weather is still in question, Commodity Weather Group said in a report on Monday. 

“Cold surge next week in Plains wheat still poses a winterkill risk, even though models still underplaying cold intensity,” the forecaster said. 

Wheat for March delivery closed up 2¼¢ to $4.20½ a bushel on the Chicago Board of Trade. Kansas City futures rose 1¾¢ to $4.19¼ a bushel. 

Corn futures lost ½¢ to $3.47 a bushel in Chicago. 

Soybeans, meanwhile, declined amid weak demand since the start of the marketing year.

Despite low prices, overseas buyers are waiting to make major purchases. Sales of soybeans since September 1 are down 16% from the same time last year. Corn sales have dropped 28% while wheat sales are down 9%, according to the USDA. 

Soybean futures for January delivery lost 4½ to $9.62¾ a bushel in Chicago. 

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