Farm markets enter Memorial Day weekend by closing lower

The outside markets are unfavorable to corn and soybean markets.

INDIANOLA, Iowa -- On Friday, the CME Group farm markets headed into the long Memorial Day weekend by closing lower.

At the close, the July corn futures finished 1/4¢ higher at $3.18. Dec. corn futures ended 1/4¢ lower at $3.32 1/4.
 
July soybean futures settled 1 3/4¢ lower at $8.33 1/4. November soybean futures finished 1¢ lower at $8.44 1/2.

July wheat futures ended 7 1/4¢ lower at $5.08 1/4. 
July soymeal futures closed $1.60 per short ton higher at $284.10. July soy oil futures finished 0.47 cent lower at 26.64¢ per pound. In the outside markets, the NYMEX crude oil market is $0.36 per barrel lower at $33.56 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 8 points lower.

Al Kluis, Kluis Advisors, says that the markets are watching the technical signals of corn, soybeans, and wheat.    

“A close below $8.29 in July soybeans would be breaking below the prior three-week low. This would give momentum to the bears for next week. Spring wheat was unable to find new buyers after prices pushed to the highest level in a month on Thursday. The corn chart is slowly moving up and to the right on the chart, which is a positive trend. However, a 13¢ range for the month of May is unlikely to attract many momentum traders to the bull camp. RBOB gasoline and ethanol futures moved over the $1.00 mark this week. Analysts are hopeful we will start seeing improvement in weekly demand numbers,” Kluis told customers in a daily note.

Kluis added, “The funds were holding a very sizable short position in corn and a record short position in Minneapolis spring wheat in the Commitments of Traders report last Friday. Spring wheat has a reason for short-covering to occur. However, the story for corn has not yet changed enough to trigger short-covering.”

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Thursday’s Grain Market Review

At the close of CME Group trading Thursday, soybean futures settled lower while wheat edged up.

July corn futures finished 1¾¢ lower at $3.17¾; December corn futures ended 1¢ lower at $3.33.
 
July soybean futures finished 11¾¢ lower at $8.35; November soybean futures are 8½¢ lower at $8.45½.

July wheat futures settled 2¼¢ higher at $5.16. 

July soy meal futures ended $3.00 per short ton lower at $282.50. July soy oil futures are 0.25¢ lower at 27.11¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.35 per barrel higher at $33.84 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 44 points lower.

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DES MOINES, Iowa -- At mid-session Thursday, corn and soybean are down, with soybeans off sharply.

During late morning trading July corn futures are 1¾¢ lower at $3.17¾; December corn futures are 1½¢ lower at $3.32½.
 
July soybean futures are 11¾¢ lower at $8.35; November soybean futures are 9¢ lower at $8.45.                

July wheat futures are 1½¢ higher at $5.15¼.    

July soy meal futures are $3.30 per short ton lower at $282.20. July soy oil futures are 0.26¢ lower at 27.10¢ per pound.

Here’s what’s driving today’s trading, according to Jack Scoville, senior analyst with the PRICE Futures Group:  “Soybeans are selling off on good growing conditions breaking out in the Midwest and the lack of China buying on the daily announcements this week--despite great export sales on the weekly data.  Corn weekly sales are a little disappointing and the weather is better for Corn, too.  The end of the week and a long three day weekend are coming!”

In the outside markets, the NYMEX crude oil market is $0.27 per barrel higher at $33.76 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 38 points lower.

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DES MOINES, Iowa -- On Thursday, the grain futures are mostly lower except for wheat, which continues Wednesday’s move up.

In early trading, July corn futures are ½¢ lower at $3.19; December corn futures are ½¢ lower at $3.33½. 
 
July soybean futures are ½¢ lower at $8.46¼; November soybean futures are ½¢ higher at $8.54½.

July wheat futures are 6½¢ higher at $5.20¼. 

July soy meal futures are unchanged at $285.50 per short ton. July soy oil futures are 0.12¢ higher at 27.48¢ per pound.

In the outside markets, the NYMEX crude oil market is 98¢ per barrel higher at $34.47 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 73 points higher.

Before the opening of trading today, Al Kluis of Kluis Commodity Advisors had these expectations. “Corn bulls are going to have a tough time convincing the funds to give up on their shorts given the current outlook for new-crop carryout. Soybeans have a glimmer of hope for higher prices if we see strong exports. A wheat rally will hinge on weather overseas and reports from crop tours here in the U.S.”

Separately, the USDA’s weekly Export Sales Report on Thursday shows corn and soybean old-crop export sales that were ahead of trade expectations. The old-crop numbers were as follows:

  • Corn: 884,200 metric tons (mt) vs. the trade’s expectations of between 500,000 mt and 1 million metric tons (mmt)
  • Soybeans: 1,205,000 mt vs. the trade’s expectations of 500,000 mt and 1 mmt
  • Wheat 175,800 mt (2019/2020) and 252/400 (2020/2021)
  • Soybean meal: 198,800 mt (old crop)

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Wednesday’s Grain Market Review

NDIANOLA, Iowa -- On Wednesday, the CME Group’s farm markets close mostly higher.

At the close, July corn futures finished 1¾¢ lower at $3.19¼; December corn futures settled ¼¢ lower at $3.34.
 
July soybean futures finished 4¼¢ higher at $8.46¼; November soybean futures closed 3¾¢ higher at $8.54.

July wheat futures ended 15¢ higher at $5.13¼. 

July soy meal futures closed 90¢ per short ton higher at $285.50. July soy oil futures closed 0.27¢ higher at 27.36¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.53 per barrel higher at $33.49 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 382 points higher.

Al Kluis, Kluis Advisors, says the markets are being influenced by the growing weather and the crude oil market’s direction.    

“The 2020 corn and soybean crops are off to a good start with nonthreatening weather forecasts for the next two weeks,” Kluis told customers in a daily note. The rally back in the energy and stock markets around the world shows that the consumer economy is starting to recover and demand for food and energy is increasing each week. 

Kluis added, “What will be in today’s Energy Information Agency report? The key is to watch weekly gasoline consumption. U.S. weekly gasoline consumption has improved over the last four weeks. I think today’s EIA report will show even more demand for gasoline, diesel, and ethanol again.”

The Energy Information Administration (EIA) released its weekly Energy Report Wednesday. For the week ending May 15, ethanol production increased by 7.5%, or 46,000 barrels per day (b/d), to 663,000 b/d. This amounts to 27.85 million gallons daily and a six-week high. 

However, the coronavirus continues to depress production. This week’s output is 38.1% below the same week in 2019. 

The four-week average ethanol production rate increased 4.3% to 604,000 b/d, equating to 9.26 billion gallons annually.

Ethanol stocks dropped 2.3% to 23.6 million barrels, the lowest volume since January. Total reserves are just 0.9% above year-ago volumes.

The volume of U.S. gasoline supplied to the U.S. market, a measure of implied demand, slipped 8.2% to 6.790 million b/d (104.09 billion gallons annualized) following five consecutive weeks of expansion. As a result, gasoline demand was 28.0% lower than a year ago.

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets closed mixed.

At the close, July corn futures finished ½¢ higher at $3.21½; December corn futures ended 1½¢ higher at $3.34½.
 
July soybean futures settled 2½¢ lower at $8.42½; November soybean futures closed 2½¢ lower at $8.50¾.

July wheat futures ended 1½¢ higher at $4.98. 

July soy meal futures are 50¢ per short ton lower at $284.60. July soy oil futures are 0.23¢ lower at 27.09¢ per pound.

In the outside markets, the NYMEX crude oil market is 71¢ per barrel higher at $32.53 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 39 points lower.

Jack Scoville, PRICE Futures Group, says the corn market is trying to build bullishness. 

“A slower day with corn fading from strong resistance at the $3.25, basis July, area. Kind of too bad we don’t have more interest to push this thing through, but the charts are constructive and I think we eventually will take it out and go higher,” Scoville says.  

Wheat is fading a bit in Turnaround Tuesday trading, as are the beans, Scoville says.  

“There is really not too much to talk about in either market today, with no Chinese demand in the beans so far this week and uneven conditions continuing in the EU and on into Russia. So we are bumping along today,” Scoville says.

Al Kluis, Kluis Advisors, says the markets are being influenced by the growing weather and the crude oil market’s direction.    

“On Monday, the large rally in the U.S. stock and energy markets helped rally the corn and soybean markets, while wheat closed mixed,” Kluis told customers in a daily note. What will happen in the crude oil market this week? 

The USDA Crop Progress Report on Monday showed corn planting at 80% complete vs. 67% last week and just 44% last year. Soybean planting is 53% complete compared with 38% last week. Spring wheat planting is reported at 60%, a full 20 percentage points behind the five-year average.

Kluis says, “U.S. corn and soybean crops are off to a great start, after going in very early and now getting timely rains in late May. At this time, both corn and soybeans have trend line or better yield potential.”

“I am watching the trade in June crude oil very closely today. This is the last day of trading for June WTI crude oil futures. Last month on the last day of trade for the May WTI crude oil, futures price plunged to -$38 per barrel in a chaotic day of trade. I do not expect that in the June contract today. However, to be honest, I never thought crude oil would go to a negative number until it did,” Kluis says.

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets finish mostly higher.

At the close, July corn futures settled 1½¢ higher at $3.20½; December corn futures ended ¾¢ higher at $3.32½.
 
July soybean futures closed 6½¢ higher at $8.45; November soybean futures settled 7¼¢ higher at $8.52¾.

July wheat futures finished 3¼¢ lower at $4.97. 

July soy meal futures closed $2.40 per short ton lower at $285.10. July soy oil futures ended 0.74¢ higher at 27.32¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.50 per barrel higher at $31.93 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 940 points higher.

Britt O’Connell, cash advisor for Commodity Risk Management Group, says both corn and soybeans have found strength on the first trading day of the week.

“We cannot point to one thing specifically that has provided support to the commodity complex but rather a host of supportive features. From a technical perspective, both corn and soybeans have been consolidating into an upward channel. With no more bad news and the funds carrying a hefty short position, corn seems content to tread water,” O’Connell says.

She adds, “A stronger crude oil and stock market gave underlying support. Soybeans can attribute some of their strength to the continued Chinese purchases. Since the beginning of May, China can be linked to approximately 2,154,000 tonnes of U.S. soybeans. It appears that China may be making an effort to fulfill the Phase One trade deal commitments. While they will need to have a continued presence, certainly these are moves in the right direction,” O’Connell says.

Al Kluis, Kluis Advisors, says the markets are eyeing this week’s corn market action and the crude oil market’s direction for further guidance.    

“The very bearish USDA corn supply/demand report was anticipated by the markets. Corn prices closed about unchanged on the weekly chart last week. Now the key to signal a low will be a close in July corn above the two-day high at $3.20½,” Kluis tells customers in a daily note. “What will happen in the crude oil market this week? A close above the April high ($33.15) will be a positive signal for the energy market and the entire commodity complex.”

Kluis adds, “The positive rally in the energy markets was offset by a ramp-up in trade tensions again between the U.S. and China.”

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