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Farm markets rise ahead of frost Friday

Unknown buyer purchases U.S. soybeans.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets jump, as a cold snap get set to strike the Corn Belt’s crops.

At the close, the July corn futures finished 1 1/4¢ higher at $3.19 1/4. Dec. corn futures closed 1 3/4¢ higher at $3.35 1/4.
 
July soybean futures finished 6 1/4¢ higher at $8.50 1/2. November soybean futures closed 7 1/4¢ higher at $8.55 1/4.

July wheat futures settled 1/2¢ lower at $5.22. 

July soymeal futures ended $2.70 cents per short ton higher at $290.80. July soy oil futures closed $0.28 cent higher at 26.54¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.08 per barrel higher at $24.63 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 455 points higher.

On Friday, private exporters reported to the USDA export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors are watching how harsh this weekend’s frost might be toward the crops.    

“Grain prices bounced Thursday, as traders weighed the impact of cool temperatures this weekend across a large area of the northern Plains. Traders are also optimistic that China may step in and buy more U.S. grains ahead of the planned ‘phase one’ trade deal meeting. Every time we have discussed trader optimism about that trade deal, it hasn’t been long until we discussed how they were let down once again. Will the meeting next week be more of the same?” Kluis wonders in a daily note. 

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Thursday’s Grain Market Review

At the close of CME Group trading Thursday, corn, wheat, and soybean futures settled higher, with corn about 1¢ per bushel lower from midsession prices.

July corn futures finished 3¾¢ higher at $3.18; December corn futures ended 2¾¢ higher at $3.34¼.
 
July soybean futures finished 11¾¢ higher at $8.44¼; November soybean futures are 9¢ higher at $8.48¼.

July wheat futures settled 5¢ higher at $5.22½. 

July soy meal futures ended unchanged at $288.20 per short ton. July soy oil futures are 0.42¢ higher at 26.26¢ per pound.

“The market is largely being influenced by China, yes China, buying U.S. corn to the tune of  371,000 tonnes of old-crop corn and 315,000 tonnes of new-crop corn,” Britt O’Connell of Commodity Risk Management Group says of today’s trading. “Remember, China does not typically buy any U.S. corn, so this is good news. Top trade deal negotiators Robert Lighthizer and Chinese Vice Premier Liu He are expected to talk early next week and discuss the implementation and progress of Phase 1. China is lagging the pace necessary if they are to meet their ag purchase commitments. China is also rumored to be shopping the market for soybeans today. All of this along with the threat of frost across most of the Corn Belt has markets trading the right direction. While the corn would fare OK in a frost and much is yet emerged, soybeans would not make it.” 

In the outside markets, the NYMEX crude oil market is $0.20 per barrel higher at $24.19 per barrel, the U.S. dollar is lower, and the Dow Jones Industrials are 283 points higher.

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DES MOINES, Iowa -- At midsession Thursday, grain futures are sharply higher.

During late-morning trading July corn futures are 4¾¢ higher at $3.19; December corn futures are 4¢ higher at $3.35¼.
 
July soybean futures are 12¼¢ higher at $8.44¾; November soybean futures are 10¾¢ higher at $8.50.

July wheat futures are 8¢ higher at $5.25½. 

July soy meal futures are $1.30 per short ton higher at $289.40. July soy oil futures are 0.51¢ higher at 26.35¢ per pound.

“Rumors of Chinese buying or soybeans and corn coupled with higher outside markets are the main drivers of the rally in grains today,” says Sal Gilbertie founder of Teucrium Trading.

In the outside markets, the NYMEX crude oil market is $1.63 per barrel higher at $25.62 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 275 points higher.

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DES MOINES, Iowa -- On Thursday, grain futures are higher.

In early trading, July corn futures are 3¼¢ higher at $3.17½; December corn futures are 2½¢ higher at $3.33¾.
 
July soybean futures are 5¾¢ higher at $8.38¼; November soybean futures are 4¼¢ higher at $8.43½.

July wheat futures are 7¢ higher at $5.24½. 

July soy meal futures are 80¢ per short ton higher at $288.90. July soy oil futures are 0.24¢ higher at 26.08¢ per pound.

Jack Scoville, senior analyst for PRICE Futures Groups, says, "China bought a whiole lot of corn to help that market.  There is a general sense that futures have bottomed for a while.  China might be active buying beans. The U.S. economy starting to slowly reopen after Coronavirus helps demand ideas.  Trump pushing to open the meat processors is also helping a bit."

In the outside markets, the NYMEX crude oil market is $2.54 per barrel higher at $26.53 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 306 points higher.

Besides watching export markets and the trade’s reaction to possible frost in the Midwest, Al Kluis of Kluis Commodity Advisors is following key employment numbers.

“The weekly Jobless Claims Report was released at 7:30 this morning,” Kluis says.  [Another 3.169 million Americans filed for unemployment benefits in the week ending May 2, exceeding economists expectations for 3 million initial jobless claims. Stocks opened higher, however as jobless claims are trending lower.]  “Then, on Friday, we will get the monthly nonfarm payroll data. This includes the U.S. unemployment rate. These reports could impact grain prices.”

Separately, the USDA’s weekly Export Sales Report Thursday shows a sharp decline from last week’s numbers.

  • Corn: 872,100 metric tons (mt) vs. 1,695,700 mt a week earlier
  • Soybeans: 830,600 mt vs. 1,183,300 mt  the week before
  •  Wheat: 380,100 mt vs. 622,500 mt previously
  • Soybean meal: 171,200 mt vs. 223,700 mt

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Wednesday’s Grain Market Review

INDIANOLA, Iowa -- On Wednesday, the CME Group’s farm markets remain weaker.

At the close, July corn futures finished 2¾¢ lower at $3.14¼; December corn futures finished 3¢ lower at $3.31¼.
 
July soybean futures settled 7¢ lower at $8.32½; November soybean futures finished 7¼¢ lower at $8.39.

July wheat futures ended 3¼¢ lower at $5.17½. 

July soy meal futures closed $1.30 per short ton lower at $288.10. July soy oil futures closed 0.47¢ lower at 25.84¢ per pound.

In the outside markets, the NYMEX crude oil market is 69¢ per barrel lower at $23.45 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 32 points lower.

Al Kluis, Kluis Advisors, says investors are watching the latest energy numbers to be released today.    

“Today’s Energy Information Agency Report will tell us if the inventories of crude oil and ethanol continue to increase as much as the trade is expecting. With the huge drop in the U.S. oil rig count and the cutback in ethanol production, we could be getting close to a balance between supply and demand in the energy sector,” Kluis told customers in a daily note. 

Kluis added, “On Tuesday, the strong rally in crude oil helped pull corn and soybeans higher, while wheat closed lower. On Tuesday, the grain markets closed slightly higher as the crude oil and stock market closed sharply higher.”

The Energy Information Agency released its weekly energy report. U.S. weekly ethanol production jumped 61,000 barrels per day totaling 598,000 barrels per day, up 11.3% from its all-time lows.

U.S. ethanol weekly stocks fell 13.97% from their all-time high.

Cattle Market

Terry Roggensack, The Hightower Report, says that the short-term technical action in the cattle market is weak, and it suggests that a near-term top is in place. 

“However, the massive rally in beef prices has left traders reluctant to believe that the futures will remain at such a huge discount to the cash market,” Roggensack stated in a note to customers. 

The USDA boxed beef cutout was up $12.52 at midsession yesterday and closed $18.77 higher at $428.82. This was up from $330.82 the previous week and was another new all-time high. The cutout has increased $206.48 since April 8, a 93% gain. June cattle closed sharply lower on the session yesterday and took out Monday’s lows, according to The Hightower Report. 

“Traders are concerned that the move to new all-time highs for beef prices in each of the last nine trading sessions could slow demand,” Roggensack says. 

The USDA estimated cattle slaughter came in at 80,000 head, yesterday. This brings the total for the week so far to 155,000, up from 149,000 last week at this time but down from 240,000 a year ago, according to The Hightower Report

Cash live cattle traded at $95 in several regions yesterday, which is toward the middle/low end of last week’s range. In Iowa/Minnesota, 150 head were traded at that price; in Kansas, 108 head; and in Nebraska, 1,341 head. This leaves June cattle at a discount of $8.52 to the cash market, Roggensack’s note stated. 

“Packer profit margins are likely at record highs, and this may provide stability to the cash market,” Roggensack says. 

Roggensack added, “Beef prices have exploded to new record highs for nine sessions in a row, and this should give slaughter plants incentive, along with the Defense Production Act, to get slaughter capacity back up closer to a normal level. June cattle support is at 85.05, with 90.92 as resistance.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets trade mostly higher.

At the close, July corn futures finished 1½¢ higher at $3.17; December corn futures closed ¼¢ higher at $3.34¼.
 
July soybean futures closed 3¢ higher at $8.39½; November soybean futures ended ¾¢ higher at $8.46¾.

July wheat futures settled 1¼¢ higher at $5.20½. 

July soy meal futures closed $1 per short ton higher at $289.40. July soy oil futures ended 0.16¢ higher at 26.31¢ per pound.

In the outside markets, the NYMEX crude oil market is $4.09 per barrel higher at $24.48 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 377 points higher.

Jack Scoville, PRICE Futures Group, says today’s trade has been a back-and-forth affair. 

“There’s little turnaround Tuesday price action going on. Crude oil is higher and that is helping, although crude is far from levels to allow ethanol producers to make profits. But at least it is higher. The economy is starting to open slowly but surely, and this can only help in the long run. Still, a lot of questions on the meat processors and their ability to kill and process cattle and hogs and poultry. At least moves are going on there. The workers will need to return to get things really going in the sector and no one knows if they will, in fact, come back. So, we are drifting but holding and that is probably about what we can expect for a while,” Scoville says.

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

  • Export sales of 378,000 metric tons of soybeans for delivery to China. Of the total, 136,000 metric tons is for delivery during the 2019/2020 marketing year, and 242,000 metric tons is for delivery during the 2020/2021 marketing year.
  • Export sales of 109,135 metric tons of corn for delivery to Mexico. Of the total, 45,220 metric tons is for delivery during the 2019/2020 marketing year, and 63,915 metric tons is for delivery during the 2020/2021 marketing year.

The marketing year for corn and soybeans began September 1.

Jim Bower, Bower Trading, says investors are watching the possible frost expected to hit this weekend. 

“Corn will be burned back by the cold with most of the crop not likely far enough along to be permanently damaged, but some producers may choose to replant anyway while soybeans are more vulnerable to cold and may suffer permanent damage in some areas,” Bower told customers in a daily note.

He noted, “Although corn and soybeans have been planted in many areas that will see significant freezes, recent and coming cooling has and will slow crop emergence and keep the total portion of the crop vulnerable to freezes small compared with the entire U.S. crop as a whole. A few light freezes will occur in the far northwest as well as in Michigan Wednesday with some far northwestern locations seeing lows in the upper 20s and lower 30s Thursday before freezes expand Friday into next Tuesday with Saturday morning coldest in most areas,” Bower told customers in a daily note.

Bower added, “Light freezes will occur as far south as the eastern Dakotas to Minnesota to eastern Iowa and parts of northeastern Missouri through Wisconsin and central and northern Illinois to Michigan, Ohio, and parts of northeastern Kentucky with hard freezes in many areas from eastern North Dakota to Michigan.” 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets are off to a rocky start.

At the close,July corn futures finished 3¢ lower at $3.15¾; December corn futures closed 2¾¢ lower at $3.34.
 
July soybean futures settled 13¢ lower at $8.36½; November soybean futures finished 9¼¢ lower at $8.45¾.

July wheat futures closed 3¢ higher at $5.19½. 

July soy meal futures settled $4.10 per short ton lower at $288.40. July soy oil futures ended 0.35¢ lower at 26.15¢ per pound.

In the outside markets, the NYMEX crude oil market is 58¢ per barrel higher at $20.36 per barrel, the U.S. dollar is higher, and the Dow Jones Industrials are 115 points lower. 

Jason Roose, U.S. Commodities, says today’s markets just can’t find any bullish news to trade.  

“Grains have traded lower most of the day. Friendly news is hard to find, and old bearish news continues to find its way back to the market. There are talks of increased tariffs with China and ideal planting conditions that have eroded most of last week’s short covering. Also, unknown spring weather and optimism on exports may limit breaks at these levels,” Roose says.

Al Kluis, Kluis Advisors, says the U.S.-China tension over the coronavirus has the attention of the investors.    

“The increase in tension with China will put pressure on the stock and commodity markets until somehow some cooperation begins,” Kluis told customers in a daily note. “We are watching the May-to-July soybean spread. The carry was out to 10¢ last week and has narrowed to just 1½¢. When the bull spreads start working, it is a positive signal for prices – even if the futures are lower at this time.”

Kluis added, “The energy markets posted an impressive rally back last week, which helped corn stabilize and soybeans rally.”

On Monday, private exporters reported to the USDA export sales of 115,800 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year. 

The marketing year for corn began September 1.

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