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It’s Report Day, Ag Markets Fall

Today’s USDA/WASDE Reports will be released at 11 a.m. CST.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets weaken, ahead of USDA data.

In early trading, the Dec. corn futures are ¾¢ lower at $3.74½. March corn futures are ¾¢ lower at $3.83.
 
Jan. soybean futures are 1¾¢ lower at $9.34¼. March soybean futures are 2¢ lower at $9.46¾.

Dec. wheat futures are 2¼¢ lower at $5.10½.

December soymeal futures are $0.80 per short ton lower at $304.80. December soy oil futures are 0.09¢ higher at 31.52¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.91 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 13 points lower.

On Friday, private exporters reported to the USDA the following activity:

  • Export sales of 270,000 metric tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year.
  • Export sales of 217,040 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for corn and soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors will be watching today’s USDA Reports closely.
 
“The USDA supply/demand report today is likely to be bearish for corn, as the USDA factors in smaller exports, and with reduced corn being used for ethanol. Even if the USDA makes a small reduction in the corn yield, ending stocks may be larger than last month. The trade expects stocks to be 112 million bushels less than October,” Kluis told customers in a daily note.

Kluis added, “Watch how the trade reacts to the USDA reports today. The key is the market action from noon until the close at 1:15 PM.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets lean on the soybean complex to go higher.

At the close, the Dec. corn futures closed 3½¢ lower at $3.75. March corn futures finished 4¢ lower at $3.83¾.
 
Jan. soybean futures finished 9¢ higher at $9.36¼. March soybean futures closed 8¢ higher at $9.48¾.

Dec. wheat futures finished 4¼¢ lower at $5.12½.

December soymeal futures ended $6.70 per short ton higher at $305.60. December soy oil futures closed 0.32¢ lower at 31.43¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.01 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 240 points higher.

Jack Scoville, PRICE Futures Group, says that the soybean market is up on strong export sales and the reports of progress in the China trade talks.

“Corn is down on lousy export sales and corn and wheat down on ideas of bearish reports tomorrow. Farmers are busy at harvest and specs are quiet or selling corn, I guess. We might get a bearish report, but we are factoring that in now so we could bounce tomorrow unless the report is real bearish. Volumes are low, so I don’t look for much to happen the rest of the day, but corn could still sink a little lower,” Scoville says.

On Thursday, private exporters reported to the USDA the following activity:
 

  •  Export sales of 136,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year. 
  •  Export sales of 133,000 metric tons of soybean meal for delivery to the Philippines during the 2019/2020 marketing year.

 
The marketing year for soybeans began September 1; for soybean meal, it began October 1.

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

Corn: 487,900 metric tons (mt) vs. the trade’s expectations of between 300,000 and 650,000 mt

Soybeans: 1.807 mmt vs. the trade’s expectations of 600,000 and 1.2 mmt

Wheat: 360,600 mt vs. the trade’s expectations of between 350,000 and 600,000 mt

Soybean meal: 390,000 mt vs. the trade’s expectations of 150,000 and 300,000 mt

Al Kluis, Kluis Advisors, says investors position themselves ahead of tomorrow’s USDA/WASDE Reports.
 
“What looked like a typical choppy trade day leading up to a USDA Crop Production Report turned lower after an announcement that the U.S./China trade deal might not happen until December. We still remain very sensitive on the trade deal. Look for a choppy trade today as traders get positioned ahead of the Friday USDA report,” Kluis told customers in a daily note.

Kluis added, “Basis levels for corn and soybeans remain firm. It is an especially good time to consider locking in some corn basis levels. As we get to the last 20% of corn harvest, we could see more bushels head to town.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets weaken.

At the close, December corn futures finished 3¢ lower at $3.78¾; March corn futures ended 4¢ lower at $3.87½.
 
January soybean futures settled 6¾¢ lower at $9.27¼; March soybean futures closed 6½¢ lower at $9.40¾.

December wheat futures ended 1½¢ higher at $5.16¼.

December soy meal futures finished $3.80 per short ton lower at $298.90. December soy oil futures closed 0.18¢ higher at 31.75¢ per pound.

In the outside markets, the NYMEX crude oil market is 86¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 3 points lower.

Jason Roose, U.S. Commodities, says the farm markets try to decipher mixed trading news.

“Corn and beans are seeing a risk off trade today, as the November USDA’s WASDE Report approaches, harvest continues in the Midwest, but at a much slower pace than normal. Even though the yields are variable, in both corn and beans, and lower than last year, markets are trading as if a yield and production increase is in site by the USDA Friday. No formal announcement from China on a solid trade agreement will give the grains resistance.”

Roose added, “Also beans are under pressure with fear of a potential sharp increase in world bean ending stocks, with an adjustment in China consumption and thoughts that the USDA may have overstated 2018/2019 demand.”

Al Kluis, Kluis Advisors, says investors await the USDA’s updated yield estimates.
 
“Grain traders are patiently awaiting the USDA report on Friday. It appears that some bearish data is being expected: Corn prices are nearly 20¢ off the high of October 14, while soybean futures are 25¢ off their high. Will the USDA report have shocking numbers, or will it be in line with estimates?” Kluis posed the question to customers in a daily note.

Kluis added, “It is more likely that we see the USDA report on Friday provide a bigger surprise for soybeans than for corn. The corn bulls may have to wait for the January Final Production Report as the slow harvest pace continues to drag on this fall.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets fall.

At the close, December corn futures finished 1¼¢ lower at $3.81¾; March corn futures settled 1¾¢ lower at $3.91¾.
 
January soybean futures closed 3¾¢ lower at $9.34¼; March soybean futures finished 4¢ lower at $9.47¼.

December wheat futures closed 5¼¢ higher at $5.15¼.

December soy meal futures finished 30¢ per short ton higher at $302.70. December soy oil futures closed 0.30¢ lower at 31.57¢ per pound.

In the outside markets, the NYMEX crude oil market is 66¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 83 points higher.

Britt O’Connell, cash advisor for Commodity Risk Management Group, says investors are keeping trades close to the vest.

“Not much chatter today in the markets. Some prereport positioning is all I imagine we see this week – likely very quiet trade,” O’Connell says.

Al Kluis, Kluis Advisors, says it’s hard for investors to ignore the slow harvest pace.
 
“The USDA Crop Progress Report showed U.S. farmers still have 18.9 million acres of soybeans that are not yet harvested, including 1.36 million acres in Minnesota, 2.4 million acres in North Dakota, and 640,000 acres in South Dakota. These farms will have from 10% to 20% yield loss,” Kluis told customers in a daily note.

Kluis added, “We are watching the cash bids for corn and soybeans out of the Pacific Northwest to see if and when China starts to make some corn and soybean purchases for immediate shipment.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets diverge.

At the close, December corn futures finished 6¢ lower at $3.83¼; March corn futures ended 5¢ lower at $3.93¼.
 
January soybean futures closed 1¼¢ higher at $9.38; March soybean futures settled 2¢ higher at $9.51¼.

December wheat futures finished 6¼¢ lower at $5.09½.

December soy meal futures closed $1.50 per short ton lower at $302.40. December soy oil futures ended 0.84¢ higher at 31.87¢ per pound.

In the outside markets, the NYMEX crude oil market is 47¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 110 points higher.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says soybeans have found themselves caught in a range from $9.20 to $9.40. Opening at the bottom side of the range this morning, beans caught a bid.

“All commodities are struggling to find positive territory. The trade remains focused on the upcoming WASDE on Friday.  Could be interesting as the USDA has said that it will include damage from the snowstorm that hit Dakotas and Minnesota earlier in October,” O’Connell says.  

It doesn’t seem like the market has a lot bought in for that, she says.

“If we see harvested acres reduced, it could give beans a shot in the arm, maybe corn follows. Outside forecasters believe that we could see a very slight revision higher in corn yields. Could be offset by lower harvested acres – or do they wait to do that,” O’Connell says.  

Otherwise, not much by way of news, she says.  

“Sounds like Phase 1 of the U.S., China trade tariff agreement is still to be signed within November. Market is rather indifferent about it, either taking an “I’ll believe it when I see it” mentality or simply not believing it will have a drastic impact,” O’Connell says.

Al Kluis, Kluis Advisors, says it’s a weather market and a trade market.
 
“Weather concerns are increasing for South America, and the news is positive about the U.S./China trade talks,” Kluis told customers in a daily note.

Kluis added, “The USDA Crop Production Report this coming Friday will not show the low test-weight corn that is being reported by most farmers. That increases the odds that the final crop production report in January will report a smaller corn crop than this week’s report.”

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