Soybean prices trim gains Friday

More soybean sales are announced Friday.

On Friday, the CME Group’s farm markets closed off of their daily highs.

At the close, the Dec. corn futures finished unchanged at $3.98½. March corn futures closed 1¾¢ higher at $4.03½. 

Nov. soybean futures finished 4¾¢ higher at $10.56 1/4. January soybean futures closed 5¾¢ higher at $10.56½.

Dec. wheat futures finished 5¼¢ lower at $5.98½. 

Dec. soymeal futures settled $1.70 per short ton lower at $378.60. Dec. soy oil futures closed 0.55¢ higher at 33.61¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.44 per barrel lower (1.22%) at $35.73. The U.S. dollar is higher, and the Dow Jones Industrials are 432 points (1.31%) lower at 26,310 points.

On Friday, private exporters reported to the USDA export sales of 121,500 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.  

The marketing year for soybeans began Sept. 1.

Bob Linneman, Kluis Advisors, says that the bullish investors were weak-kneed this week. 

“The recent washout in grain prices is a vibrant reminder of how quickly the tides can turn when the funds get so heavily involved. If you are wondering if anything material changed in the supply-and-demand side of the grains, then the short answer is ‘not really.’ Did the recent COVID-forced closures in some countries around the globe scare the demand bulls? It is definitely a concern, but is it worth nearly 30¢ in corn and 42¢ in the soybeans in three days? The combination was more than the bulls could handle: the funds holding a very large long position, the election next week, COVID unknowns, and month-end position squaring,” Linneman told customers in a daily note.    

He added, “Bulls are worried about ethanol demand declining as crude oil continues to falter.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close lower, despite strong export sales data.

At the close, the Dec. corn futures finished 3¢ lower at $3.98½. March corn futures finished 2¾¢ lower at $4.01½. 

Nov. soybean futures closed 5¾¢ lower at $10.51¼. January soybean futures ended 4¼¢ lower at $10.50½.

Dec. wheat futures closed 5¢ lower at $6.03¾. 

Dec. soymeal futures settled $0.20 per short ton higher at $376.90. Dec. soy oil futures closed 0.36¢ lower at 33.06¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.19 per barrel lower (3.18%) at $36.20. The U.S. dollar is higher, and the Dow Jones Industrials are 287 points (1.09%) higher at 26,809 points.

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

  • Export sales of 1,432,550 metric tons of corn for delivery to Mexico. Of the total, 891,540 metric tons is for delivery during the 2020/2021 marketing year and 541,010 metric tons is for delivery during the 2021/2022 marketing year.
  • Export sales of 140,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures. Here is the list:

  • Corn = 2.243 million metric tons vs. the trade’s expectations of between 700,000 mmt and 1.5 mmt. An unknown and Mexico were the biggest buyers.
  • Soybeans = 1.62 million metric tons. vs. trade’s expectations of 1.0 mmt to 2.0 mmt. Of that total, China and Mexico were the biggest buyers.
  • Wheat = 803,200 mt. 
  • Soybean meal =199,300 mt.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that investors react to higher coronavirus cases. 

“Grain prices experienced their first steady sell-off during the entire day on Wednesday. Was it the funds reducing long positions ahead of the election next week? Or can the sell-off be tied to coronavirus? Cases have been escalating across the globe, which has many traders concerned that we could see an economic slowdown again,” Kluis told customers in a daily note.    

He added, “Crude oil prices slid 9% this week, which puts futures at the lowest prices since mid-June. Traders fear a slowdown in demand is inevitable due to a global spike in COVID cases. This slowdown would most likely impact ethanol demand as well.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets closed sharply lower, following a broad-based sell-off.

At the close, the Dec. corn futures finished 14½¢ lower at $4.01½. March corn futures ended 12¼¢ lower at $4.04½. 

Nov. soybean futures settled 25¢ lower at $10.57¼. January soybean futures finished 21¾¢ lower at $10.54¾.

Dec. wheat futures closed 7¢ lower at $6.08¾. 

Dec. soymeal futures ended $7.30 per short ton lower at $376.70. Dec. soy oil futures closed 0.69¢ lower at 33.42¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.20 per barrel lower (5.56%) at $37.37. The U.S. dollar is higher, and the Dow Jones Industrials are 785 points (2.86%) lower at 26,677 points.

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

Optional origin sales of 207,000 metric tons of corn for delivery to South Korea during the 2020/2021 marketing year. An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.

  • Export sales of 110,000 metric tons of soybeans for delivery to Egypt during the 2020/2021 marketing year.
  • Export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

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

Al Kluis, Kluis Advisors, says that the markets are looking for buyers. 

“Both corn and soybeans are testing their respective 10-day averages to see if willing buyers will step in at this initial line of support. CBOT and KC wheat contracts have fallen through the 10-day average and are quickly closing in on the 20-day average. If wheat bears can push prices under this moving average, it could be a warning sign for the corn and soybean bulls,” Kluis told customers in a daily note.    

He added, “The daily export sales reports have been mostly quiet thus far this week. If China does indeed issue new corn import quotas, the corn bulls will get the catalyst they need for the next push higher in prices.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets attempt to stay in the green.

At the close, the Dec. corn futures finished 1¾¢ lower at $4.16. March corn futures closed 2¢ lower at $4.16½. 

Nov. soybean futures ended 5¼¢ lower at $10.82¼. January soybean futures finished 7¢ lower at $10.76.

Dec. wheat futures settled 4¼¢ lower at $6.15¾. 

Dec. soymeal futures finished $5.60 per short ton lower at $384.00. Dec. soy oil futures closed 0.35¢ lower at 34.11¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.98 per barrel higher (2.54%) at $39.54. The U.S. dollar is lower, and the Dow Jones Industrials are 161 points (0.35%) lower at 27,587 points.

Jack Scoville, PRICE Futures Group, says that the market is stalling out a little bit with the lack of export sales announcements today. 

“Kind of a quiet session, so far. The weather has been bad for the end of harvest, but it is supposed to get a lot better to allow for the rest of harvest to get done. The market could use a setback to create some new buying, in my opinion. Longer term price trends are still up and are likely to stay up no matter what happens this week. We will see how the news flows and the money flows,” Scoville says. 

The USDA Crop Progress report showed corn harvest at 72% complete, soybeans at 83% complete; the first winter wheat crop rating showed winter wheat crop rated 41% good to excellent. 

Meanwhile, large export sales of soybeans and soybean meal were announced again on Monday.

Al Kluis, Kluis Advisors, says that investors will be watching the export pace of ag commodities going forward. 

“The Chinese government will issue a lot more import tariffs so that they can buy more U.S. corn. The U.S. Trade Representative office said last week that China has reached 71% of the purchases they need to make of ag products to hit the goal of Phase 1 trade agreement. With soybeans over $10, they are likely to get to the $23-billion goal,” Kluis told customers in a daily note.    

He added, “Watch the weekly export sales and where the load-out is being made. The Gulf and the Pacific Northwest (PNW) are booked to capacity through January. As new orders come in, soybeans are moving out of Duluth and other Great Lake ports to Europe. Export capacity is being pushed to the max.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close mostly lower.

At the close, the Dec. corn futures finished 1½¢ lower at $4.17½. March corn futures ended 1¾¢ lower at $4.18½. 

Nov. soybean futures settled 4¢ higher at $10.87¼. January soybean futures closed 2¼¢ higher at $10.83¼.

Dec. wheat futures closed 12¢ lower at $6.20¾. 

Dec. soymeal futures closed $3.20 per short ton lower at $389.60. Dec. soy oil futures ended 0.35¢ higher at 34.46¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.32 per barrel lower (3.31%) at $38.53. The U.S. dollar is higher, and the Dow Jones Industrials are 753 points (2.55%) lower at 27,582 points.

On Monday, private exporters reported to the USDA:

  • Export sales of 135,000 metric tons of soybean meal for delivery to the Philippines during the 2020/2021 marketing year.
  • Export sales of 120,700 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1; soybean meal began Oct. 1.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that the commodity complex is carrying a softer tone to kick off the week.  

“Overnight markets saw corn and soybeans trading higher and faded into the early morning hours. Soybeans set a new contract high overnight and corn tested Friday’s high. Both of these markets have seen a tremendous push on the long side from the funds, amassing over 200,000 contracts in both corn and soybeans. Both U.S. and South American weather patterns look amicable to field work, harvest here and planting there. That, paired with a slight slowdown in Chinese purchases, has the markets on thin ice,” O’Connell says.  

She added, “Without continued bullish news, these markets are vulnerable to a correction lower. We continue to note the slow pace of farmer-selling with both basis and spreads doing a lot of work to get bushels moving. This will be an interesting trend to monitor, as we get into the back half of harvest. Can the market really be calling for all of its corn now? I feel a reckoning coming, something is going to have to give,” O’Connell says.

Al Kluis, Kluis Advisors, says that investors will see a new harvest progress number today from the USDA. 

“The USDA Crop Progress report today will show corn harvest at about 75% complete and soybean harvest at 82%. Crop harvest is going to slow down with the last 20% of the corn taking till Thanksgiving to get out,” Kluis told customers in a daily note.    

He added, “I am watching the bull spreads in corn. The spread between December 2020 and July 2021 corn has gone from a 14¢ carry three weeks ago to just 1¢ on Friday. If December corn closes above July 21 corn, then it suggests new highs again in the corn market.”

Heading into this week, the funds remain long the ag commodities markets, according to Friday’s Committments of Traders Report.

The CFTC Commitments of Traders report shows that funds are buying. 

  • Corn = 48,000 contracts were added, making the outside investors now long 218,000 contracts. 
  • Soybeans = 5,000 contracts added last week, now they are long 231,000 contracts.
  • Wheat = When all three exchanges are combined, the funds are long by 95,000 contracts.
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