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Corn Closes Higher, Soybeans Recover Most Losses on Demand

Strong demand for U.S. supplies gives futures a boost.

Corn futures closed higher on Friday and soybeans regained almost all their losses amid favorable demand for U.S. supplies. 

Corn sales in the seven days through September 13 totaled 1.38 million metric tons, topping a range of forecasts, and soybean sales came in at 917,600 tons, also beating expectations, the U.S. Department of Agriculture said in a report yesterday. 

The government reported additional sales of 121,700 metric tons of corn for delivery to unknown buyers during the 2018-2019 marketing year that started on September 1. The USDA also said an unknown buyer purchased 100,000 metric tons of soybean cake and meal for delivery in the its marketing year, which starts on October 1. 

Soybeans had been trading lower most of Friday’s session amid ongoing concerns about trade. The U.S. is set to put tariffs on another $200 billion in Chinese goods on September 24, and China said it will retaliate with duties on an additional $60 billion of U.S. goods. Neither country seems willing to blink in the escalating trade war. 

Corn futures for December delivery gained 5¼¢ to $3.57¾ a bushel on Friday on the Chicago Board of Trade.

November soybean futures lost ½¢ to $8.49¾ a bushel. Soymeal fell $4 to $310.40 a short ton and soy oil rose 0.63¢ to 28.49¢ a pound. 

December wheat dropped 1½¢ to $5.22½ a bushel while Kansas City futures were unchanged at $5.27 a bushel. 

In the outside markets, the NYMEX crude oil market rose 0.6% $70.76 a barrel, the U.S. dollar gained 0.3%, and the Dow Jones Industrial Average reached a new record, rising 73.21 points. 

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Thursday’s Grain Market Review

DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets strengthen.

At the close, the December corn futures finished 6¾¢ higher at $3.52. March futures ended 6½¢ higher at $3.64.

Nov soybean futures closed 20¼¢ higher at $8.50¼. January soybean futures finished 20¼¢ higher at $8.64.

December wheat futures closed 1½¢ higher at $5.24.

December soymeal futures finished $5.20 per short ton higher at $314.40. December soy oil futures settled $0.36 higher at 27.86¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.35 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 271 points higher.

Jason Roose, U.S. Commodities, says demand and farmer habits are helping the uptick in the markets.

“Good exports and slow producer selling are giving the grain market solid support today. Rallies are not surprising, short term, at these levels with U.S. corn and soybeans being the cheapest in the world and soybeans hitting 10-year lows,” Roose says.

On Thursday, the USDA Weekly Export Sales Report showed that corn and soybean sales beat expectations. Here are the totals:

  • Corn = 1.38 million metric tons vs. the trade’s expectations of between 500,000 and 1,100,000 mt.
  • Soybeans = 917,600 mt. vs. the trade’s expectations of between 450,000 and 900,000 mt.
  • Wheat = 468,400 mt. vs. the trade’s expectations of between 250,000 and 500,000 mt.

Separately, the USDA announced a fresh corn sale Thursday.

Export sales of 160,020 metric tons of corn for delivery to Mexico during the 2018/2019 marketing year.

The marketing year for corn began September 1.

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Wednesday’s Grain Market Review

The midweek farm markets have moved higher after so many downward trading days.

At the close, the December corn futures finished 2½¢ higher at $3.45¾. March futures closed 2½¢ higher at $3.58.

November soybean futures settled 16¢ higher at $8.30. January soybean futures ended 15¾¢ higher at $8.43¾.

December wheat futures finished 12¢ higher at $5.22½.

December soymeal futures closed $5.90 per short ton higher at $309.20. December soy oil futures settled $0.13 higher at 27.50¢ a pound.

In the outside markets, the NYMEX crude oil market is $1.28 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 181 points higher.

Mike North, president of Commodity Risk Management Group, says that after several down days, the market has found some temporary support on oversold conditions.  

“A continuation of the upward efforts by wheat together with channel support for corn has brought buyers back into the Wednesday session. Fundamentally the story has not changed, but that news has aged enough to allow today’s uptick.”

Al Kluis, Kluis Advisors, says that the pressure from the bears is unrelenting.

“The continued bearish news flow encouraged funds to add more shorts to their current position. With key timing due near October 1, it will be difficult for the bulls to get any momentum going without positive trade talks. The first signal of a possible change in trend will be a close above the prior day’s high,” Kluis stated to customers in a daily note.

Kluis added, “South American exports hit record amounts this summer. I think the reports of South American basis starting to tighten is one of the first signs that they are starting to run low on supply.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets have to fight off a lot of bearish news.

At the close, the December corn futures finished 4¾¢ lower at $3.43¼. March futures ended 4½¢ lower at $3.55½.

November soybean futures closed 9½¢ lower at $8.14. January soybean futures closed 9¼¢ lower at $8.28.

December wheat futures ended 4¼¢ higher at $5.10½.

December soymeal futures closed $2.40 per short ton lower at $303.30. December soy oil futures finished $0.33 lower at 27.37¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.93 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 238 points higher.

The White House announced it will impose a tariff on an additional $200 billion worth of Chinese imports. The effective start date was stated as September 24. The tariff amount is 10% through the end of the year, then it goes to 25%. These details were released after the close on Monday.

“The bear camp is getting crowded for corn and soybeans. The negative news needs to be refreshed daily or momentum traders will get anxious. Watch the charts for the first close above the prior day’s high. This is the first sign of a change in trend,” Kluis stated in a daily note to customers.

Also, Informa, the private analyst firm, released its 2019 U.S. Acreage estimates, Tuesday. Here they are:

  • Corn = 93.0 million
  • Soybeans = 82.27 million

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close a penny from where they all started the session.

At the close, the December corn futures closed 3 3/4¢ lower at $3.48. March futures closed 3 3/4¢ lower at $3.60.

Nov soybean futures closed 7¢ lower at $8.23.  Jan. soybean futures settled 7¢ lower at $8.37.

Dec. wheat futures ended 5 1/4¢ lower at $5.06. Dec. soymeal futures finished $3.00 per short ton lower at $305.70.

Dec. soy oil futures closed $0.06 lower at 27.70.

In the outside markets, the NYMEX crude oil market is $0.19 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 35 points lower.

On Monday, private exporters reported to the U.S. Department of Agriculture export sales of 241,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

Private exporters reported to the U.S. Department of Agriculture export sales of 241,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says that outside investors are getting less optimistic on corn.

“The Commitments of Traders report released on Friday showed the funds had been short 63,000 corn futures contracts, short 68,000 soybeans, and long 61,000 wheat. However, as the selling accelerated after the bearish USDA report last Wednesday, traders estimate the funds are now short over 100,000 contracts of corn,” Kluis stated to customers in a daily note.

He added, “Further cases of African swine flu (ASF) have been found in China. Now there is a report of ASF in Belgium near the French border. This needs to be contained soon or world demand for feed will be affected.”

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