Soybeans, corn close higher on 2020's last day

Light rain in Argentina not enough to help replenish soil moisture.

Soybean futures finished in the teens on the last day of the year on concerns about dry weather in South America. 

Rain in growing regions of Argentina likely won’t be enough to improve soil moisture, said Donald Keeney, an agricultural meteorologist at Maxar, in a note sent to clients. Dry weather will spread again next week and is forecast through the six- to 10-day period, the forecaster said.

Grain trading will be closed on the Chicago Board of Trade tomorrow in observance of New Year’s Day before resuming on Sunday evening.

March soybean futures closed up 9½¢ to $13.10 a bushel on the Chicago Board of Trade.

Corn futures were 11¼¢ higher at $4.85 3/4 a bushel.

March soymeal futures gained $1.30 to $429.10 a short ton.

March soy oil futures added 0.58¢ to 42.44¢ per pound.

March wheat futures closed up 1¢ to $6.41¾ a bushel. Kansas City futures gained 4½¢ to $6.05¾ a bushel. 

In the outside markets, the NYMEX crude oil was up 0.1% at $48.42 a barrel. The U.S. dollar is lower, and the Dow Jones Industrials were up 0.5% to 30,553.89 points.

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Wednesday’s Grain Market Review

Wheat futures jumped to a six-year high on worries that Russian exports will decline amid a shipping quota and soybeans and corn rose on South American weather concerns. 

SovEcon, the Russian ag consultancy, said it now expects Russian wheat exports of about 36.3 million metric tons, down from a prior outlook for 40.8 million tons due to an export quota imposed to keep domestic food prices in check, Reuters reported this week.

Some farmers in the country will delay wheat sales until July when the quota is expected to end, the report said.

A port strike in Argentina that left about 150 ships waiting finally ended after almost three weeks, according to a statement from the port operator. Workers will receive a 35% wage increase and a bonus to go back to work, the statmement said. 

March wheat futures jumped 21¢ to $6.39 1/2 a bushel on the Chicago Board of Trade. Kansas City futures gained 15 1/2¢ to $6.00 1/2 a bushel. 

January soybean futures rose 5 1/2¢ to $12.95 1/2 a bushel. March soybean futures were up 1¢ to $12.97 a bushel.

March corn futures were 8¢ higher at $4.74 a bushel. May corn futures also closed 8¢ higher at $4.74 a bushel. 

March soymeal futures gained $2.20 to $426.50 a short ton.

March soy oil futures added 0.05¢ to 41.8¢ per pound.

In the outside markets, the NYMEX crude oil was up 0.7% at $48.31 a barrel. The U.S. dollar is lower, and the Dow Jones Industrials are 0.3% higher at 30,426.84 points.


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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets find strength, as Argentina’s soybean crop size gets smaller due to drought, combined with a port strike in that South American country.

At the close, the March corn futures finished 9½¢ higher at $4.66. May corn futures settled 9¢ higher at $4.66. 
 
January soybean futures closed 40¼¢ higher at $12.95¼. March soybean futures finished 38¾¢ higher at $12.96.

March wheat futures closed 4¼¢ higher at $6.18¼. 

March soymeal futures finished $11.60 short term higher at $424.30.

March soy oil futures closed 0.70¢ higher at 41.75¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.39 per barrel higher (+0.82%) at $48.01. The U.S. dollar is lower, and the Dow Jones Industrials are 22 points lower (-0.07%) at 30,381 points.

Bob Linneman, Kluis Advisors, says that investors are preparing for the end of the year. 

“This year-end position squaring (‘window dressing’) should be expected after the wild rally grains have seen. It does seem as though yesterday’s price action could have been linked to funds unwinding long soybeans and short corn. Recall a few weeks ago we discussed the scenario that soybeans had a better chance to post a bigger dollar amount rally than corn. That idea opened the door for funds to buy soybeans and sell corn as a spread trade,” Linneman stated in a daily note to customers.

Kluis added, “The price action in soybeans on Monday favored the bears by the end of the day. However, soybean put options reacted poorly in face of the decline. This could signal that traders are not convinced this sell-off will be sustained.”

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Monday’s Grain Market Review

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

At the close, the March corn futures settled 5½¢ higher at $4.56½. May corn futures closed 5¼¢ higher at $4.57. 
 
January soybean futures settled 8¼¢ lower at $12.55¼. March soybean futures closed 7¼¢ lower at $12.57¼.

March wheat futures closed 12¾¢ lower at $6.14¼. 

March soymeal futures settled $1.40 short term lower at $412.70.

March soy oil futures finished 0.08¢ lower at 41.05¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.55 per barrel lower (-1.14%) at $47.68. The U.S. dollar is lower, and the Dow Jones Industrials are 204 points higher (+0.68%) at 30,403 points.

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

  • Export sales of 233,700 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 125,000 metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year.
  • Export sales of 149,572 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 33,000 metric tons of soybean oil for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn and soybeans began Sept. 1; soybean oil began Oct. 1.

Jack Scoville, PRICE Futures Group, says that investors are selling the soybean market.
 
“It looks like spec long liquidation is hitting the beans. The lack of rain in South America remains concerning and the demand reports are good today. But it has run a long way without much correction, so here we are with one going into the end of the year. The corn market is holding strong on spreads as much as anything. Wheat is getting trashed on better weather for the Great Plains and not much more,” Scoville says.

All Kluis, Kluis Advisors, says that global factors are moving the markets. 

“On Friday, the grain markets closed higher on commercial buying and continued weather concerns for South America. Dry conditions continue in southeast Brazil and large areas of Argentina. On Friday corn and soybeans again posted new highs. Corn closed 4¢ higher, soybeans were 5¢ higher, and wheat closed 2¢ higher to 2¢ lower. Continued weather concerns – as well as the ongoing port strike in Argentina – have the grain markets again moving higher,” Kluis stated in a daily note to customers.

Kluis added, “As more private analysts project an increase in inflation, many U.S. and global investors will view the grain markets as a good inflation hedge. The huge amount of debt the U.S. is creating in a low interest rate environment will provide many challenges down the road.”

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