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Soybean Prices Close Sharply Lower

Sluggish corn demand to hold back market bulls.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets end mostly lower, with soybeans taking the biggest haircut.

At the close, the Dec. corn futures finished unchanged at $3.86¾. March corn futures closed ½¢ lower at $3.97.
 
Nov. soybean futures closed 13¢ lower at $9.20½. Jan. soybean futures closed 12½¢ lower at $9.34½.

Dec. wheat futures settled 1¾¢ higher at $5.17¼.

December soymeal futures closed $2.30 per short ton lower at $303.30. December soy oil futures finished 0.38¢ lower at 30.96¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.39 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 153 points higher.

Jack Scoville, PRICE Futures Group, says that beans and corn prices weakened late in the session because, after all, it is harvesttime and elevators usually sell ahead for potential purchases over the weekend.

“For beans, there was some spec selling on no new China buys,” Scoville says. “Plus, the daily charts show a downturn getting started that could move another 8¢ lower with extended swing targets just below $9.00 per bushel. So, a reason for spec longs to get out and spec shorts to add. Wheat is still firm on firm world markets. Overall, another light-volume day around here,” Scoville says.

Al Kluis, Kluis Advisors, says investors are not finding the bullish news that they are looking to trade.
 
“Weekly export sales yesterday were rather dismal. U.S. grain prices continue to look for new news to trade on. This continued sluggish start for corn exports is a concern for bulls in the marketplace. Soybeans had an off week for sales, but have seen an uptick in demand, which gives some confidence. Expect grains to continue in this choppy back-and-forth trade,” Kluis told customers in a daily note.

Kluis added, “Corn exports are off to a very sluggish start in the new marketing year. This will eventually put pressure on the basis levels at the ethanol plants. Without a robust export market, the processors could fill up quickly once corn starts to move.”

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Thursday’s Grain Markets Review

On Thursday, the CME Group’s farm markets lose their strength and end that way.

At the close, December corn futures finished ¾¢ lower at $3.87; March corn futures closed 1¾¢ lower at $3.98.
 
November soybean futures settled ¼¢ lower at $9.33¾; January soybean futures closed 1¼¢ lower at $9.47.

December wheat futures closed 4¢ lower at $5.17.

December soy meal futures settled $3 per short ton lower at $305.60. December soy oil futures finished 0.76¢ higher at 31.34¢ per pound.

In the outside markets, the NYMEX crude oil market is 39¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 69 points lower.

Private exporters reported to the USDA export sales of 264,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.
 
The marketing year for soybeans began September 1.

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

  • Corn: 2,900 metric tons (mt) vs. the trade’s expectations of between 400,000 and 900,000 mt
  • Soybeans: 475,200 mt vs. the trade’s expectations of 700,000 and 2 mmt
  • Wheat: 262,400 mt vs. the trade’s expectations of between 200,000 and 600,000 mt
  • Soybean meal: 110,100 mt vs. the trade’s expectations of 100,000 and 300,000 mt

Al Kluis, Kluis Advisors, says investors are noticing the slower pace of the soybean harvest.
 
“We simply have not had much for new news to trade on lately. The markets seem to be drifting sideways. Harvest is progressing in most places. However, with harvest so spread out and late, we just are not seeing the commercials pressure the market lower like we normally see in the middle of harvest,” Kluis told customers in a daily note.

Kluis added, “Based on the soybean yields we have been seeing, the USDA will likely lower the soybean yield again in the November 8 crop report.”

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Wednesday’s Grain Markets

On Wednesday, the CME Group’s farm markets have little support.

At the close, December corn futures finished ¾¢ higher at $3.88¼; March corn futures ended ½¢ higher at $4.00.
 
November soybean futures closed ¼¢ lower at $9.33¼; January soybean futures ended unchanged at $9.48.

December wheat futures settled 2¾¢ higher at $5.20¾.

December soy meal futures closed $1.70 per short ton higher at $308.60. December soy oil futures ended 0.27¢ lower at 30.58¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.25 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 33 points lower.

Private exporters reported to the USDA export sales of 128,000 metric tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says investors are still digesting what the Chinese announcement on trade tariffs means for the soybean market.
 
“The big headline on Tuesday was tied to comments that China might offer tariff exemptions on a sizable amount of U.S. soybeans. The key word is ‘might.’ If traders expected it to really happen, we should have seen prices make a convincing move higher. However, the soybean market was nearly flat at the end of trading on Tuesday. The lackluster price action that followed this headline warrants caution for the soybean bulls. Unless we see soybean exports pick up and confirm this headline, the bears will try to regain control of prices,” Kluis told customers in a daily note.

Kluis added, “Corn exports are falling further behind the USDA pace on a weekly basis. Ethanol margins have not been profitable for much of 2019. A combination of decreased demand and lower production could leave the corn market in a trading range until a trade deal is reached.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets have support from a bullish Crop Progress Report.

However, after trading as a high as a dime, the soybean market has sold off.

At the close, December corn futures finished ¾¢ higher at $3.88; March corn futures closed ½¢ higher at $4.
 
November soybean futures settled ¾¢ higher at $9.34; January soybean futures closed 1½¢ higher at $9.48¾.

December wheat futures ended 5¼¢ lower at $5.18.

December soy meal futures settled 80¢ per short ton lower at $306.90. December soy oil futures closed 0.37¢ higher at 30.85¢ per pound.

In the outside markets, the NYMEX crude oil market is 90¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 42 points higher.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says corn and bean markets find themselves higher today, after the Chinese vice foreign minister said that if the U.S. and China continue to respect each other, no problem could not be resolved.

“After a strong open, the markets have backed off their earlier highs. Both markets continue to trade a 20¢ range where they have found comfort. I expect that to continue until we have reason not to – possibly the November 8 WASDE, as it is supposed to include either real or perceived damage from the frost and snow a couple of weeks ago,” O’Connell says. 

Al Kluis, Kluis Advisors, says investors are reacting to harvest delays.
 
“I am watching harvest progress of soybeans in Minnesota, North Dakota, and South Dakota. Wet weather and snow later this week will slow down the already slow soybean harvest. When the USDA factors in a smaller crop and increased exports, the November USDA Supply/Demand Report will take projected soybean ending stocks down from 460 million bushels to less than 400 million bushels,” Kluis told customers in a daily note.

Kluis added, “The weather looks wetter in South America and a lot of crop was harvested over the last weekend ahead of the rain.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets sell off.

At the close, December corn futures closed 3¾¢ lower at $3.87¼; March corn futures finished 3¼¢ lower at $3.99½.
 
November soybean futures closed ¾¢ lower at $9.33½; January soybean futures ended ¾¢ lower at $9.46¾.

December wheat futures closed 8¾¢ lower at $5.23½.

December soy meal futures settled 80¢per short ton lower at $307.70. December soy oil futures closed 0.12¢ higher at 30.48¢ per pound.

In the outside markets, the NYMEX crude oil market is 46¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 45 points higher.

Al Kluis, Kluis Advisors, says investors have a lot of world crop weather to watch.
 
“The wet weather throughout the Corn Belt later this week and into early November will result in very slow harvest for both corn and soybeans this year,” Kluis told customers in a daily note.

Kluis added, “How much rain will hit – and when – in the dry areas of central Brazil? The planting delays for soybeans will not have much impact on soybean yields (but the corn production in Brazil will move lower) as the double-crop corn acreage and yield potential moves lower.”

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