You are here

Much like the stock market, farm prices fall Friday

USDA reports fresh corn sales.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets end the week lower.

At the close, the May corn futures finished 5¾¢ lower at $3.76. July corn futures ended 4½¢ lower at $3.79¼.
 
May soybean futures closed 5¾¢ lower at $8.91¾. July soybean futures closed 5¢ lower at $9.00.

May wheat futures settled 3¢ lower at $5.15¼.

May soymeal futures finished $1.20 per short ton higher at $305.10. May soy oil futures closed 0.64¢ lower at 28.75¢ per pound.

In the outside markets, the NYMEX crude oil market is $4.60 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 738 points lower.

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

  • Export sales of 211,336 metric tons of corn received in the reporting period for delivery to unknown destinations during the 2019/2020 marketing year 
  • Export sales of 234,688 metric tons of corn for delivery to Japan during the 2019/2020 marketing year 

The marketing year for corn began September 1.

Al Kluis, Kluis Advisors, says as the outside markets go, so go the ag markets.       

“One thing about the stock market and this violent action back and forth is that when we see this type of trade action, it typically signals we are close to a top or bottom. Time will tell if we are at a bottom. For the grains, we will likely just trend sideways waiting for the stock market to stabilize and China to start buying U.S. products,” Kluis stated in a daily note to customers.

Kluis added, “I think with pressure on grain prices from the coronavirus and a volatile stock market lately, our timing cycles, which suggest a low for corn and soybean in early March, will prove to be spot-on this year.”

-------------

Thursday’s Grain Market Review

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

At the close, May corn futures closed 3¼¢ lower at $3.83; July corn futures finished 2½¢ lower at $3.83¾.
 
May soybean futures settled 10¼¢ lower at $8.97; July soybean futures closed 10¼¢ lower at $9.05½.

May wheat futures finished ½¢ higher at $5.18½.

May soy meal futures closed $5 per short ton lower at $303.90. May soy oil futures ended 0.35¢ lower at 29.39¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.01 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 1,015 points lower.

Separately, the USDA’s weekly Export Sales Report Thursday shows weak soybean demand figures.

Corn: 869,200 metric tons (mt) vs. the trade’s expectations of between 700,000 and 1.3 mmt

Soybeans: 346,400 mt vs. the trade’s expectations of 500,000 to 1.0 mmt

Wheat: 570,400 mt vs. the trade’s expectations of between 375,000 and 600,000 mt

Soybean meal: 321,600 mt vs. the trade’s expectations of 225,000 to 400,000 mt

Jack Scoville, PRICE Futures Group, says the markets dropped due to profit-taking, outside market pressure.

“Back-and-forth day for corn and soybeans with some indications of good cash movement on the rally, especially corn. The Export Sales Report was very bad for beans and a reason to see prices lower. Corn sales were not great, but were in the low end of expectations. Wheat sales were good. Specs taking profits on longs and holding back on new buying after futures in corn, and soy went to resistance areas but did not move on through. Looking for sideways to weaker trade to develop for the rest of the week,” Scoville says. 

Al Kluis, Kluis Advisors, says as the outside markets go, so go the ag markets.       

“U.S. grain prices remain very well supported. Strength in the stock market helped support grain prices on Wednesday as confidence is slowly restored in the U.S. and around the world. The U.S. did sell some sorghum to China yesterday, so this could be the start of some good demand coming to the U.S. from China. Grain prices will remain heavily influenced by the outside markets such as the stock market and crude oil. However, as long as they are stable, we expect grain prices to remain stable, too,” Kluis stated in a daily note to customers.

Kluis added, “China is slowly getting back to conducting business as normal pre-coronavirus. As it gets back to 100%, we should see an increase in demand for U.S. commodities.”

-------------

Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets close mostly higher.

At the close, May corn futures finished 3½¢ higher at $3.85; July corn futures settled 2½¢ higher at $3.86¾.
 
May soybean futures ended 3¾¢ higher at $9.07¼; July soybean futures closed 1¾¢ higher at $9.15½.

May wheat futures finished 9¢ lower at $5.18½.

May soy meal futures closed $1.20 per short ton lower at $308.90. May soy oil futures finished 0.58¢ higher at 29.74¢ per pound.

In the outside markets, the NYMEX crude oil market is even per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 901 points higher.

Darin D. Fessler, Lakefront Futures & Options LLC, says the markets are reacting to corn spread trading, suggesting a physical supply issue that may pop up later this year.

“Basis around the country continues to remain historically strong, which is another leading indicator of a short supply,” he says. 

“For soybeans, with concern over Argentina’s recent dryness and soybeans, in general, we’re seeing some positive technical action,” Fessler says.

“If we see a soybean closing price above the 20-day moving average near $9.12, a run toward the 50-day moving average near $9.33/34 is likely in the near term,” Fessler says.

Matt Tranel, cash adviser for Commodity Risk Management Group, says the soybean complex is being supported by meal prices, and that has a lot to do with Argentina.

“A new president was elected there in late 2019 who isn’t as friendly to ag. Argentina’s agricultural ministry has stated that export taxes will increase from 30% to 33%. Argentina is the largest soybean meal exporter in the world, so the soybean complex is being supported because of potential export opportunities,” Tranel says.  

Tranel adds, “Wheat had rumors of China lurking on Tuesday; nothing has materialized yet so the market is selling off. Corn is interesting. After falling because of the coronavirus outbreak, carry has been stripped out of the market and a flat market that could turn inverted. Inverted markets show an interest of securing corn sooner rather than later.”

On Wednesday, the USDA announced export sales of 110,000 metric tons of sorghum for delivery to China during the 2019/2020 marketing year.
 
The marketing year for sorghum began September 1.

Al Kluis, Kluis Advisors, says Federal Reserve and global news are highly watched by investors.      

“The Argentine government imposed an additional 3% export tax on soybeans. Although this was widely expected, the result is still likely to be a slowdown in farmer selling. This would normally be good for U.S. exports. However, Brazil is in a perfect spot to fill any soybean export needs,” Kluis stated in a daily note to customers.

Kluis added, “The Federal Reserve made a surprising announcement on Tuesday. It decided to cut interest rates 50 basis points (½ of a percent). This was done as a result of the economic impact that the coronavirus is having now and could have in the future. The U.S. is not the first developed nation to lower interest rates to ease the economic impact the virus is creating. Is this move pre-empting something more severe on the economic front? Traders will be closely monitoring economic data reports over the coming months.”

----------------

Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets close stronger.

At the close, May corn futures settled 5½¢ higher at $3.81; July corn futures finished 5¾¢ higher at $3.83¾.
 
May soybean futures closed 2½¢ higher at $9.03; July soybean futures finished 2¾¢ higher at $9.13½.

May wheat futures ended 4¢ higher at $5.27¾.

May soy meal futures closed $1.20 per short ton higher at $310.10. May soy oil futures settled 0.25¢ higher at 29.16¢ per pound.

In the outside markets, the NYMEX crude oil market is 21¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 941 points lower.

Jack Scoville, PRICE Futures Group, says China might be booking U.S. soybeans.

“The market was going higher driven originally by hopes for a Fed rate cut and then by the rate cut after it was announced. A weaker U.S. dollar has helped the cause a lot, as well,” Scoville says.  

Scoville added, “Corn and wheat markets are leading the charge higher with soy kind of just there, due to the fact that Brazil has a great crop coming on. The corn chart shows that futures tested into resistance near $3.85 per bushel, basis the May contract before backing off. So, we might have seen a temporary high struck today,” Scoville says. “Corn and wheat have no such news and are hanging out,” Scoville says.

Al Kluis, Kluis Advisors, says investors are watching demand and the outside markets for direction.     

“On Monday, the rally back in the stock market helped grain and livestock futures rally, gaining back some of last week’s sharp losses,” Kluis stated in a daily note to customers. “The grain market held up very well during the collapse of the stock market. The world may be heading into a recession, but that does not mean grain prices will move lower. In fact, if you look at the last two recessions, the grain markets have rallied.”

Kluis added, “When will the European Central Bank and the U.S. Federal Reserve Board lower interest rates? I hope to see that rate change made this week, instead of waiting until the Fed meets March 17-18. That type of coordinated move to cut rates would be positive for the stock and commodity markets.”

-------------

Monday’s Grain Market Review

On Monday, the CME Group’s strong soybean market leads corn to a higher finish.

At the close, May corn futures closed 7¼¢ higher at $3.75; July corn futures settled 6¢ higher at $3.78.
 
May soybean futures ended 8½¢ higher at $9.01; July soybean futures finished 9¼¢ higher at $9.10½.

May wheat futures closed 1½¢ lower at $5.23¼.

May soy meal futures finished $3.30 per short ton higher at $308.90. May soy oil futures closed 0.23¢ higher at 28.91¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.31 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 717 points higher.

Jason Roose, U.S. Commodities, says the grains are having a short covering rally today.

“It’s a pleasant surprise, with bullish news in short demand but vulnerable to more of a recovery. There’s added premium with the funds leaning heavily short. With the U.S. dollar sharply lower and continued optimism that China will purchase corn, DDG, and soybeans and increase demand,” Roose says.

Al Kluis, Kluis Advisors, says investors are watching demand and the outside markets for direction.     

“The bull spreads are working in the corn and soybean markets. This tells us demand is starting to improve at these lower price levels,” Kluis stated in a daily note to customers.

Kluis added, “Watch the U.S. stock market. If prices plunge and close below the low made last Friday, then the grain markets will be pulled lower, as well.”

Read more about

Tip of the Day

Agronomy Tip: Customize Your Nitrogen Management Plan

Two farmers on a phone in a tractor cab. Evaluate your fields for a nitrogen plan, managed by zones.

Talk in Marketing

Most Recent Poll

Will you attend a trade show in the next 3 months?