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Soybeans Close 10¢ Higher, Friday

All eyes are on this afternoon's CFTC Report.

DES MOINES, Iowa--  Friday’s CME Group’s soybean futures have strongest finish in a long time, up over the $9.00 mark.

At the close, the May futures finished 3¢ higher at $3.73. July futures ended 2¾¢ higher at $3.82¼.
 
May soybean futures ended 10¾¢ higher at $9.09¼. July soybean futures closed 10 3/4¢ higher at $9.23.

May wheat futures closed 9½¢ higher at $4.62¼.

May soymeal futures finished 4.90 per short ton higher at $310.80. May soy oil futures settled 0.14¢ lower at 29.43¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.05 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 142 points higher.

Jason Roose, U.S. Commodities, says that the bullish market factors are lining up.

“Grains are finding solid support today with fund short covering, wet weather, and flooding not ideal for an early planting, and optimism from China that exports will increase on all agricultural products,” Roose says.

Al Kluis, Kluis Advisors, says that investors will be watching the corn and soybean markets today.

“Rumors of China buying corn from the U.S. will prove to be true. There have been rumors of China buying up to 7 MMT of corn from the U.S. annually. This is about 275 million bushels of corn, and would be a big boost to corn fundamentals,” Kluis told customers in a daily note.

At the close on Tuesday, the funds were estimated to be holding over 200,000 short positions in corn, 80,000 shorts in soybeans, and 75,000 shorts in wheat.

Kluis added, “The Commitments of Traders report will be released at 2:30 p.m. CT today. Rumors are that the funds are holding a record-short position in corn and a huge short position in soybeans. This is not negative in the long term.”

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Thursday’s Grain Market Review

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

At the close, the May futures finished 3¾¢ higher at $3.70¼. July futures closed 3¼¢ higher at $3.79½.
 
May soybean futures finished 2½¢ lower at $8.98. July soybean futures closed 2½¢ lower at $9.12¼.

May wheat futures ended 5½¢ higher at $4.52¾.

May soymeal futures finished 1.20 per short ton higher at $305.90. May soy oil futures closed 0.36¢ lower at 29.57¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.22 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 42 points lower.

On Thursday, the USDA’s Weekly Export Sales Report strong soybean figures.

  • Corn = 846,600 metric tons vs. the trade’s expectations of between 800,000 and 1.500,000 mmt.
  • Soybeans = 1.911 mmt. vs. the trade’s expectations of between 1.10 mmt. and 2.0 mmt.
  • Wheat = 346,000 mmt. the trade’s expectations of between 400,000 and 750,000 mmt.
  • Soybean meal = 226,000 mmt. the trade’s expectations of between 50,000 and 300,000 mt.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that corn has found support after setting new contract lows last week.  

“The funds had pushed to the largest short position that they have held since January 2018 – a casualty at that time to the soybean and wheat markets heavy fundamentals. The first area of resistance that we will test is the 3.80 zone, which the March contract struggled mightily with,” O’Connell says.  

Wheat finally caught a bit of a bid, as bottom feeders began to feel it a value buy given the time of year, O’Connell says.  

“A flurry of export sales have also given support as the U.S. has finally become competitive in the global market. With burdensome supplies and no positive news regarding a trade deal with China, beans will likely continue to struggle. A meeting between the two presidents has been pushed back ‘until at least April.’ Corn will have to remain cautious, as we move into spring, as to not buy too many acres.”

Al Kluis, Kluis Advisors, says that investors will be watching the March contracts expire today.

“March futures on corn, soybeans and wheat all go off the board at 12:00 CT today. What price will they have when they expire? We will likely see a gap higher once we roll to the May contract. We will fill that gap within one or two weeks,” Kluis told customers in a daily note.

At the close on Tuesday, the funds were estimated to be holding over 200,000 short positions in corn, 80,000 shorts in soybeans, and 75,000 shorts in wheat.

Kluis added, “Talk of China buying some corn off the Pacific Northwest got the corn market excited. We took a lower trade on Wednesday and turned it higher. The funds are rumored to be holding a record short position in corn and a large short position in soybeans ahead of spring planting. This means we could see an interesting spring planting season.”

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Wednesday’s Grain Markets Review

On Wednesday, the CME Group's ag markets turn mostly higher.

At the close, the May futures closed ¾¢ higher at $3.66½. July futures finished ¾¢ higher at $3.76¼.
 
May soybean futures finished 4¢ higher at $9.01. July soybean futures closed 3¾¢ higher at $9.14.

May wheat futures ended 5¾¢ lower at $4.47¼.

May soymeal futures settled 1.70 per short ton higher at $304.70. May soy oil futures closed 0.06¢ lower at 29.93¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.41 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 123 points higher.

Peter J. Meyer, S&P Global Platts, head of grain and oilseed analytics, says that negatively perceived comments from U.S. Ambassador Lighthizer on the trade talks seem to have given way to some continuation of yesterday’s gains.  

“Rumors that China is in the market for 2.0 million metric tons of U.S. corn are widespread, possibly reversing the export cut in the March WASDE. Continued ‘noise’ about the size of fund shorts in corn, soybeans, and wheat is getting louder, although it has minimal impact on our fundamental analysis,” Meyer says.  

Meyer adds, “Asian Swine Fever issues in China remain noteworthy, with some now suggesting that 30% of the herd has been eradicated. As a result, U.S. hog prices have seen a nice rebound over the past five days, while prompt meal prices barely held $300 yesterday. Always difficult to trade a market dominated by money flow, which is the situation currently.”

Al Kluis, Kluis Advisors, says that investors will be watching the corn market’s performance in the second half of March.

“The funds are holding a large short position in wheat and likely did not find the crop rating decline in Texas very comforting in the Monday afternoon crop condition report. Some local reports suggest the wheat area in Kansas and Oklahoma is not off to as good of start as the crop ratings suggest. Traders will keep a very close eye on the weekly crop ratings in these three states going forward. If wheat has indeed found a low, then can it pull corn and soybeans higher,” Kluis told customers in a daily note.

At the close on Tuesday, the funds were estimated to be holding over 200,000 short positions in corn, 80,000 shorts in soybeans, and 75,000 shorts in wheat.

Kluis added, “Can corn and soybean prices close over the 20-day average this week? Currently, May corn is about a dime away while May soybeans are 15¢ away. A move over this moving average would indicate the spring low was just etched on the charts.”

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Tuesday’s Grain Market Review

On  Tuesday, the CME Group’s farm markets lean on the wheat market to move higher.

At midsession, the May futures are 2½¢ higher at $3.64. July futures are 2¼¢ higher at $3.73.
 
May soybean futures are 4½¢ higher at $8.94¼. July soybean futures are 4½¢ higher at $9.08½.

May wheat futures are 19¾¢ higher at $4.48.

May soymeal futures are $1.30 per short ton higher at $302.60. May soy oil futures are 0.19¢ higher at 29.83¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.38 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 59 points lower.

Jason Roose, U.S. Commodities, says the markets have received some buying interest.

“Multiple reasons for a nice short covering rally today in the grains. The funds are close to being historically short in corn, there is slow farmer-selling, positive U.S./China trade talks, and a weaker U.S. dollar. All of these make the U.S. commodities more competitive with exports in the future,” Roose says.

Al Kluis, Kluis Advisors, says that investors will be watching the corn market’s performance in the second half of March.

“Can corn prices put in a major low in late March 2019, much like they did in 2016? Late March of 2016 was the last time funds were short that much corn at this time of year. The timing and the actual price level is very close to where we were at in 2016. My current estimate is that funds are now short 220,000 contracts of corn,” Kluis told customers in a daily note.

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Monday’s Grain Market Review

Investors watch the CME Group soybean market fade, as China buys a large amount of U.S. soybeans in the current marketing year.

At the close, the May futures finished 2¼¢ lower at $3.62. July futures finished 2¢ lower at $3.71½.
 
May soybean futures settled 5¾¢ lower at $8.90. July soybean futures ended 5¾¢ lower at $9.04.

May wheat futures closed 11¢ lower at $4.28½.

May soymeal futures finished 2.40 per short ton lower at $301.30. May soy oil futures closed 0.01 lower at 29.64¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.66 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 173 points higher.

Private exporters reported to the U.S. Department of Agriculture export sales of 926,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year.
 
The marketing year for soybeans began Sept. 1.

Matt Pierce, Futures International LLC director of commodity consulting, says the market is still feeling pressure from the increased USDA ending stocks and a lack of fresh catalysts concerning trade war.

“Wheat is lower in sympathy of MATIF (Europe’s wheat exchange) searching for reason to move higher. There is chatter concerning growing short positions in wheat, corn, and beans heading into emergence and planting.

Pierce adds, “The planting weather concerns build in the Delta, after more rains over weekend. Cool temps dominate for next two weeks.”

Al Kluis, Kluis Advisors, says that investors will be watching key price supports as the markets fall.

“The markets held at key support levels on Friday after the release of the negative USDA reports. The huge fund short is becoming a supportive factor for the grain markets,” Kluis told customers in a daily note.

He added, “Watch to see if these key levels of support can hold. That is $3.62 for May corn, May soybeans at $8.92, and May CBOT wheat at $4.34. Also watch to see if the low for the week comes in by noon on Monday and the highs are made late in the week. This would signal a change to the bearish pattern we have been in since January.”

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