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Corn, Wheat Markets Trade Lower Friday

Soybeans are adding 4¢ per bushel.

DES MOINES, Iowa -- The CME Group's farm markets have traded mixed most of the week and that's how they closed Friday's session.

At the close, the Sep. corn futures finished 4¢ lower at $4.14 1/4. Dec. corn futures closed 3¢ lower at $4.24 1/2.
 
Aug. soybean futures closed 3/4¢ higher at $8.83. November soybean futures ended 1 1/4¢ higher at $9.01.

Sep. wheat futures settled 3 1/4¢ lower at $4.96.

December soymeal futures finished $0.10 per short ton lower at $309.70. December soy oil futures closed $0.23 higher at 29.02¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.06 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 13 points higher.

Jason Roose, U.S. Commodities, says that the markets face bearish factors.

“With non-threatening weather and poor exports, corn and soybeans continue to lose value. There is minor support in the soybean trade, today, as we trade both sides of unchanged with continued U.S./China trade talks,” Roose says.

Al Kluis, Kluis Advisors, says that the markets will undergo a sideways trading pattern.

“Corn exports were dismal and soybeans had a net cancellation. Wheat was the highlight, but with two of the three grains being poor, wheat struggled as well. Weather is a non-event now in the marketplace, and there is still no word on when trade talks will resume with China. As a result, the path of least resistance is sideways to lower,” Kluis told customers in a daily note.

Kluis added, “The recent downward pressure on the grain prices is due to more commercial selling. They are cleaning out bins to get ready for the 2019 crop. Farm selling has been next to zero in both old crop and new crop.”

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Thursday's Grain Market Review

On Thursday, the CME Group’s farm markets try to find a bottom, with the exception of the higher wheat prices.

At the close, the Sep. corn futures finished 5 1/2¢ lower at $4.18 1/4. Dec. corn futures closed 3 1/4¢ lower at $4.27 1/2.
 
Aug. soybean futures closed 8 1/2¢ lower at $8.82 1/4. November soybean futures ended 8 1/2¢ lower at $8.99 3/4.

Sep. wheat futures settled 1 3/4¢ higher at $4.99 1/2.

December soymeal futures closed $3.00 per short ton lower at $309.80. December soy oil futures closed $0.01 lower at 28.79¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.10 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 149 points lower.

Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that non-threatening weather and fund activity will drive the markets, nearterm.

“Markets are extremely quiet again, today.  The extended 6-10 day forecast offers little threatening weather to most of the Corn Belt, with decent rainfall expected and normal temperatures.  The longer range forecast does have a warmer and drier tone to it, but with the majority of the crop expected to be pollinated by then, the market does not yet feel that as threatening.  The soybean market could see some support from long range forecasts should it be realized as many fields are expected to be flowering in that time frame,” O’Connell says.  

She added, “Mild support has come into the soybean market, as trade talks with China are expected to advance with Lighthizer and Mnuchin traveling to China next week.  Regarding the outside investors, there’s certainly room for the funds to add length to corn ahead of or after the Aug 12 report should they desire.  Soybeans are likely going to struggle.”

Corn basis levels at Eastern processors have started to narrow a bit in many locations, she says. 

“Some ethanol plants were paying as much as 70¢ higher than the corn futures market prices, at times.  These crazy basis levels are something that even buyers have struggled to wrap their heads around.  The general feeling is that their is ample supply of old crop in the farmers hands, but apparently he/she is incredibly bullish and not letting it go.  Or, maybe it's not out there like we think. It's been an interesting cash trade this summer.  Something that we are not used to for sure,” O’Connell says.

Al Kluis, Kluis Advisors, say investors will be eyeing wheat price action to get a read on corn.

“The wheat market is trying to put in a low and work its way higher. If the wheat market can move higher, then that will be very supportive to the corn market.”

Kluis added, “What looked like a higher trade on Wednesday turned lower about midday. Positive talks about China and trade talks resumed along with a warmer forecast during pollination. This had us off to a decent start. For the most part, the crop is progressing nicely. Until we start talking about early frost, this market will continue to find some selling on small rallies.”

On Thursday, the USDA’s Weekly Export Sales Report shows favorable wheat figures.

Corn: 507,800 metric tons (mt) vs. the trade’s expectations of between 300,000-700,000 mt 

Soybeans: 301,900 mt vs. the trade’s expectations of between 250,000-550,000 mt 

Wheat: 659,700 mt vs. the trade’s expectations of between 200,000-400,000 mt 

Soybean meal: 227,300 mt vs. the trade’s expectations of between 110,000-400,000 mt 

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets finish trading in a narrow range.

At the close, September corn futures finished 1½¢ lower at $4.24; December corn futures settled ¾¢ lower at $4.30¾.
 
August soybean futures closed 5¼¢ higher at $8.91; November soybean futures closed 4½¢ higher at $9.08¼.

September wheat futures closed 10½¢ higher at $4.97¼.

December soy meal futures ended 30¢ per short ton higher at $312.80. December soy oil futures closed 0.32¢ higher at 28.80¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.09 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 102 points lower.

On Wednesday, private exporters reported to the USDA cancellations of export sales of 100,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

Jack Scoville, PRICE Futures Group, says investors are leaning on this week’s reports for guidance.

“I think we rallied early on reduced production estimates for Russian and European wheat, forecasts for 100˚F. temps in Europe in the next few days, and talk that China would drop tariffs against U.S. soybean purchases. But, we still could not hold pries up real well,” Scoville says.  

Scoville added, “I think the ethanol demand numbers sent corn lower on the day. Plus, there will be rain in the eastern Midwest in the next week or so. People still sitting on their hands, so I am sure that is helping make the market move volatile,” Scoville says.

Al Kluis, Kluis Advisors, says investors will have a hard time keeping the markets higher.

“The bulls are having a difficult time holding any gains over the last week. Mid- to late July is always tricky for the bulls to get enough news to keep any rally moving higher. We face an unusual situation this year as traders are anxiously waiting for the results of the planted acreage resurvey. The comments late yesterday regarding U.S. trade officials going to China isn’t going to phase either the bulls or the bears. A signed trade deal – or an approved list of tariff-exempt products – is the kind of trade news needed to impact the grains.”

Kluis added, “The soybean crop this year has a mountain to climb if we are going to see yields anywhere near the past few years. Lack of sunshine and excessive moisture continue to plague soybeans.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets finished mixed, with corn making an impressive higher close.

At the close, September corn futures ended 3¼¢ higher at $4.25¼; December corn futures closed 4¾¢ higher at $4.31.
 
August soybean futures settled 2½¢ lower at $8.85; November soybean futures settled 2¢ lower at $9.03¾.

September wheat futures finished unchanged at $4.87¼.

August soy meal futures closed $2 per short ton lower at $306.40. August soy oil futures finished 0.28¢ higher at 28.01¢ per pound.

In the outside markets, the NYMEX crude oil market is 51¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 155 points higher.

Jason Roose, U.S. Commodities, says the markets could remain choppy.

“Grains are mixed today as seasonal trade patterns continue to be negative and current weather patterns are nonthreatening. Monday’s crop conditions continue to show maturity is well below average levels, which will limit selling at current levels,” Roose says.

Al Kluis, Kluis Advisors, says investors will be eyeing each day’s updated weather forecasts.

“The weather is viewed as nonthreatening, and crop conditions are starting to improve,” Kluis told customers in a daily note. “The USDA Crop Progress Report Monday showed corn conditions down (by 1%) to 57% good to excellent, and soybean ratings are unchanged at just 54% good to excellent.”

Kluis added, “When will the pattern change in soybeans? For the last five weeks, the high for the week has come in on Monday or early Tuesday (usually Monday), and then the low is on Thursday or Friday. When that pattern changes, then the trend will change.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets closed near their daily lows, with ideal crop-weather expected.

At the close, September corn futures finished 8½¢ lower at $4.22¼; December corn futures closed 9¢ lower at $4.26¾.
 
August soybean futures settled 13¼¢ lower at $8.88¼; November soybean futures finished 13½¢ lower at $9.05¾.

September wheat futures closed 15¼¢ lower at $4.87¼.

August soy meal futures settled $2.80 per short ton lower at $308.40. August soy oil futures finished 0.37¢ lower at 27.73¢ per pound.

In the outside markets, the NYMEX crude oil market is 46¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 3 points lower.

Britt O'Connell, cash advisor for Commodity Risk Management Group, says beautiful weather is reflected in lower markets.

“We saw a really nice run on Friday as rumors were circulating that China may step into the market and buy U.S. ag products. Turns out, that was only chatter. The market seems very caught in a sideways range here. Weather this week appears nonthreatening, with mild temps across most of the Corn Belt and most getting ample rain last week.”  

She added, “Extended forecast does point towards higher temps and more rain in the coming weeks, but the market seems content to deal with it as it comes. Pollination window will be extremely wide this year. I would suspect that we stay in this rangebound market until the August 12 report, as the market looks for some direction. Beans seem content to trade a range, as well, with that market eyeing forecasts for the end of the August,” O’Connell says. 

Al Kluis, Kluis Advisors, says investors will be eyeing the USDA Crop Progress Report Monday.

“The USDA Crop Progress Report today will show corn and soybean ratings steady to 1% higher than last week. The U.S. crop is about two weeks behind normal, and it may be August before 50% of the U.S. corn has tasseled,” Kluis told customers in a daily note.

Kluis added, “Watch the short-term forecast for this week. It now looks like most of the central Corn Belt will return to normal temps with some rain through Friday. This is what the corn crop needs, but may be a little negative for prices.”

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