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Corn Market Leads the Way Friday

The U.S. dollar is lower, offering support to ag commodities.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets trade mostly higher, with corn and wheat attracting buyers.

At the close, the May corn futures finished 3 3/4¢ higher at $3.51 3/4. July corn futures ended 4¢ higher at $3.61 1/4. May soybean futures settled 5 1/2¢ lower at $8.53 1/4. July soybean futures ended 5 3/4¢ lower at $8.67.

July wheat futures ended 1¢ higher at $4.42.

July soymeal futures closed $5.90 short ton lower at $303.70. July soy oil futures finished $0.10 cent lower at 27.84¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.02 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 6 points higher.

Britt O’Connell, Commodities Risk Management Group, says that It appears as if the selling has finally dried up.  

“After amassing a record short position, the funds have either begun to take profit and/or buyers have begun to feel as if corn is a value buy,” O’Connell says.  

The U.S. and European weather models for the next 7-10 days are in agreement, colder and wetter weather.

“As we near the month of May a discussion around planting delays, should they be seen as significant, will gain traction and the attention of the markets,” O’Connell says.  

O’Connell added, “The soybean market finally starting living in its sobering reality.  We simply have a lot of supply and demand has been weak.  As we move forward should planting delays materialize, pressure will likely remain on beans.  This may cause corn/bean spread to widen.  I do think with most farmers flat price sellers and many elevators sub $8 cash at harvest, they will hold on until the last minute to plant corn.”

Al Kluis, Kluis Advisors, says that the weather is a hit-and-miss opportunity lately.

“The next five to 10 days look fairly wet. Overall, the corn and soybeans seem to be going into the ground at about a normal pace and with a full profile of moisture. Rallies in the corn and soybeans will be tough to come by,” Klus told customers in a daily note.

He added, “There has been a lot of talk about the funds and their huge short positions, especially in corn. How big will the funds’ short positions be in corn and soybeans this week? The COT report will be out at 2:30 p.m. Central Time today to let us know the answer.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets trim losses, turn mostly higher.

At the close, the May corn futures settled ¾¢ higher at $3.47½. July corn futures ended 1¼¢ higher at $3.57¼.
 
May soybean futures closed 4¢ higher at $8.59½. July soybean futures finished 4¢ higher at $8.72 3/4.

July wheat futures closed 3¢ higher at $4.41½.

July soymeal futures ended $5.60 per short ton higher at $309.60. July soy oil futures settled $0.28 lower at 27.94¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.61 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 79 points lower.

Al Kluis, Kluis Advisors, says that the selling continues for U.S. grain prices.

“As we get closer to delivery for the May contracts, it feels like we are getting a little more selling pressure. Many producers are pricing out some May contracts. The U.S. crop is getting planted and, for the most part, weather is a nonevent today,” Kluis told customers in a daily note.

Kluis added, “The funds have built a very large short position. With the carry in the market already at some attractive levels, this could incent the funds to continue to roll their short positions forward.”

On Thursday, the USDA’s Weekly Export Sales Report shows that soybean demand came in at the high end of expectations, corn in the middle.

  • Corn = 782,900 metric tons vs. the trade’s expectations of between 550,000 and 1.100,000 mmt.
  • Soybeans = 619,000 mt. vs. the trade’s expectations of between 300,000 mt. and 700,000 mt.
  • Wheat = 651,500 mt. the trade’s expectations of between 350,000 and 750,000 mt.
  • Soybean meal = 398,000 mt. the trade’s expectations of between 125,000 and 325,000 mt.

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets continue their weak ways.

At the close, the May corn futures finished 4½¢ lower at $3.46¾. July corn futures are 4¼¢ lower at $3.56.
 
May soybean futures ended 6¾¢ lower at $8.55¼. July soybean futures are 6¾¢ lower at $8.68¾.

July wheat futures closed 6½¢ lower at $4.38.

July soymeal futures finished $0.60 per short ton lower at $300.40. July soy oil futures closed $0.15 lower at 28.22¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.45 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 42 points lower.

Jason Roose, U.S. Commodities, says that the market is facing a whole slew of bearish fundamentals.

“Record supplies and a lack of a trade deal with China continue to pressure the grain markets. Plus, planting progress is slightly behind the five-year average, but no concern at this stage with the corn market in contract lows and fund trade positions at record short levels.”

He adds, “The dollar will need to weaken to make the U.S. grain more competitive in the world market,” Roose says.

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Tuesday’s Grain Market Review

At the close Tuesday, the May corn futures finished 3½¢ lower at $3.51¼. July futures were also 3¼¢ lower at $3.60¼¢.

May soybean futures ended 15¢ lower at $8.62. July soybean futures were 15¼¢ lower at $8.75½.

May wheat futures were 2¢ higher at $4.38¾.
 
May soymeal futures were $1.50 a short ton lower at $301. May soy oil futures ended 64¢ lower at $28.06 per pound.
 
In the outside markets, the NYMEX crude oil market is 66¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 152 points higher.

According to Reuters, U.S. soybean futures fell to a seven-month low on Tuesday as traders focused on demand destruction resulting from the ongoing U.S. trade war with top global soy buyer China as well as the effects of a devastating disease in China’s hog herd. 

African swine fever has hit every province in China, raising concern about a drop in Chinese demand for feedstuffs including soy and corn.

The U.S. Department of Agriculture has projected that U.S. soybean stocks at the end of the 2018/19 marketing year will reach 895 million bushels, more than double the previous year. That leads some analysts to doubt that a resolution to the U.S.-China trade war will be enough to completely offset burdensome supplies.

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At midsession Tuesday, the May corn futures are 4¢ lower at $3.50 3/4. July futures are 4¢ lower at $3.59½.

May soybean futures are 15¼¢ lower at $8.61¾. July soybean futures are down by 15½¢ at $8.75¼.

May wheat futures are 1½¢ higher at $4.37¼.
 
May soymeal futures are $2.10 a short ton lower at $300.40. May soy oil futures are 48¢ lower at $28.22 per pound.
 
In the outside markets, the NYMEX crude oil market is 77¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 171 points higher.

Funds continue to drive down corn and soybean futures, says Matt Tranel, risk management adviser with the Commodity Risk Management Group.

“In yesterday’s corn market, the funds established a new contract low at $3.54¼ per bushel on the May 2019 contract near the close,” Tranel says in an email message to Agriculture.com. “We have been witnessing a rather curious move out of the fund community since February. They are an estimated 350,000 contracts short the market currently with additional positions added in today’s market. From a technical trading perspective, anytime a new low is established in the market, that opens the door to new and additional selling. That’s what today’s corn trade is all about.

“Despite being 6% behind the five-year average for corn planting, we are actually 1% ahead of last year’s pace,” he says. “The fund community doesn’t seem too worried about planting just yet.”

“Soybeans are getting pounded today as well,” he says. “As of this email we were down 13¢ per bushel and trading at $8.97 for November 2019. The funds are an estimated 125,000 contracts short in beans. Inventories remain burdensome and soybeans have a large task ahead of them in recapturing some of the prices that were witnessed earlier on in the year.”

Jack Scoville, senior analyst with PRICE Futures Group, agrees that it’s “been another day of mostly fund selling.”

“The trend is their friend right now and the trends for both corn and beans are down,” Scoville says. “Farmers are getting a little work done, but still we’re hearing that mostly anhydrous is getting put down and just a little planting in southwest Iowa and Missouri.  There are some ideas that we are getting near some lows; I have started to see some buying creep in either for covering shorts or trying the long side or both, so we might have an interesting close. But no one is real excited about buying for a big-time long-term play, just a reaction higher.”

Jason Roose, grain analyst with U.S. Commodities, adds a few other bearish factors.

“Grains continue to lose value today, with contract lows as the next supportive level,” he says. “Disappointing bean export inspections, a planting forecast that looks ideal for most Midwest areas, and the strong U.S. dollar are factors limiting any rallies short-term.” 

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In early trading Tuesday, May corn futures are 1¾¢ lower at $3.53; July futures are 1½¢ lower at $3.62.

May soybean futures are 3½¢ lower at $8.73½; July soybean futures are down by 3¾¢ at $8.87½.

May wheat futures are unchanged at $4.35¾.

May soy meal futures are 50¢ a short ton lower at $302. May soy oil futures are .25¢ lower at 28.45¢ per pound.
 
In the outside markets, the NYMEX crude oil market is 55¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 28 points higher.

Futures prices so far have gotten no boost from Monday’s USDA Crop Progress report. It showed corn planting lagging the five-year average, with only 6% planted in the top 18 producing states, vs. the five-year average of 12%. Texas is the only state to match its five-year average of 59%. The heart of the Corn Belt is much further behind southern states, with Minnesota reporting no corn planted vs. a five average of 11%. Iowa reported 4% vs. 10% average, Illinois 1% vs. 17% and Indiana 1% vs. 5%.

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At the close Monday, May corn futures finished 3¾¢ lower at $3.54¾; July futures were also 3¾¢ lower at $3.63½¢.

May soybean futures ended 3½¢ lower at $8.77; July soybean futures were 3½¢ lower at $8.90¾.

May wheat futures were 8½¢ lower at $4.35¾.
 
May soy meal futures were 70¢ a short ton lower at $302.50. May soy oil futures ended 10¢ lower at $28.70 per pound.
 
In the outside markets, the NYMEX crude oil market is $1.73 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 44 points lower.

Ahead of the USDA’s weekly Crop Progress Report due later on Monday, analysts surveyed by Reuters forecast on average that the government would rate 60% of the winter wheat crop in good to excellent condition, unchanged from the previous week. A year ago, the USDA rated just 31% of the crop as good to excellent. Analysts also expected the USDA to show that farmers were able to plant 7% of their intended corn acres and 2% of their soybeans by Sunday. Analysts pegged the respective five-year averages at 12% for corn and 2% for soybeans. 

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At midsession Monday, May corn futures are 1¼¢ lower at $3.57¼; July futures are 1½¢ lower at $3.65¾.

May soybean futures are ¼¢ lower at $8.80¼; July soybean futures are down by ¼¢ at $8.94.

May wheat futures are 7¢ lower at $4.37¼.
 
May soy meal futures are unchanged at $303.20. May soy oil futures are 2¢ higher at $28.82 per pound.
 
In the outside markets, the NYMEX crude oil market is $65.91 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 35 points lower.

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In early trading Monday, May corn futures are 2½¢ lower at $3.56; July futures are 2½¢ lower at $3.64¾.

May soybean futures are 3½¢ lower at $8.77; July soybean futures are down by 3¾¢ at $8.90½.

May wheat futures are 6¾¢ lower at $4.37½.

May soy meal futures are 60¢ a short ton lower at $302.60. May soy oil futures are 10¢ lower at 28.70¢ per pound.
 
In the outside markets, the NYMEX crude oil market is $1.39 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 58 points lower.

Al Kluis of Kluis Commodity Advisors looks for today’s USDA Crop Progress Report to show nationwide corn planting at about 8% complete. 

“I am watching the narrow trading range in corn so far this month,” Kluis says. “Month to date, the trading range is just 11¢. I know that we still have two weeks to go. If this 11¢ trading range holds through the end of April, then it shows how flat the corn market is. You have to go back to November 2017 when prices bottomed and the trading range for the month was 17¢. The last time corn prices had just an 11¢ trading range for the month was November 2005 – right when prices put in a major low.”

A wet weather forecast for parts of the Corn Belt this week should be supportive for corn, but Kluis says the grain markets will not rally until a China deal gets done. 

According to Reuters, weakness in wheat weighs on corn market but short covering is expected to keep the declines in check.

Commodity Futures Trading Commission data released on Friday showed that large speculators boosted their net short in corn to a record 323,665 contracts.

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