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Modest Losses After Bearish Report

New crop bean contracts are up slightly

At the close Friday, the July corn futures finished 1 1/2¢ lower at $3.51 3/4

July soybean futures ended 3 1/2¢ lower at $8.09 1/4.

July wheat futures were 4 3/4¢ lower at $4.24 3/4.
 
July soymeal futures were $1.80 a short ton lower at $287.30. July soy oil futures ended .16¢ lower at 26.57¢ per pound.
 
In the outside markets, the NYMEX crude oil market is 8¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials have recovered from earlier losses and are 16 points higher.

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The USDA Supply/Demand report was released midday on Friday.

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In early trading Friday, July corn futures are 1¼¢ lower at $3.52.

July soybean futures are 1¾¢ lower at $8.11.  

July wheat futures are 2½¢ lower at $4.27.

July soymeal futures are 70¢ a short ton lower at $289.80. July soy oil futures are .10¢ lower at 26.53¢ per pound.
 
In the outside markets, the NYMEX crude oil market is 11¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are down 122 points.

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Thursday’s Grain Market Review

At the close Thursday, the July corn futures finished 11¢ lower at $3.53¼.

July soybean futures ended 14½¢ lower at $8.12¾.

July wheat futures were 9½¢ lower at $4.29½.
 
July soy meal futures were $3.80 a short ton lower at $289.10. July soy oil futures ended .37¢ lower at $26.63 per pound.
 
In the outside markets, the NYMEX crude oil market is 51¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials have pared losses and are 112 points lower.

Mike North, president of Commodity Risk Management Group, summed up today’s futures trading:

“The synopsis is simple. Wet weather remains as a supportive issue for corn. However, that is being overshadowed today by fear that Chinese retaliation is forthcoming after the announcement that the U.S. would raise tariffs to 25% on a portion of goods already being tariffed at 10%. This fear is especially pronounced in the soybean market where the spot May contract has pierced $8 a bushel. Hefty world supplies also add weight to the lower trade. The good news is that corn and wheat have both tested old lows and been able to find support.”

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At midsession Thursday, the July corn futures are 10¾¢ lower at $3.53½.

July soybean futures are 18½¢ lower at $8.08¾.

July wheat futures are 9¼¢ lower at $4.329¾.
 
July soy meal futures are $4.10 a short ton lower at $288.80. July soy oil futures are .41¢ lower at $26.59 per pound.
 
In the outside markets, the NYMEX crude oil market is 80¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 355 points lower.

Grain futures aren’t escaping the fallout from trade talk uncertainty that had pushed the Dow about 400 points lower earlier this morning.

“It’s been a while since we’ve taken nearby beans under $8. We did that today,” says Don Roose of U.S. Commodities in West Des Moines, Iowa. The last time soybean futures were under $8 was in December of 2008, according to Roose.

“From a trading standpoint, the market doesn’t like uncertainty,” says Roose, adding that in the stock market “the people who have gains have taken them.”

Jason Ward, managing director at Northstar Commodity agrees that the rocky trade talks between the Trump administration and the Chinese government are a big factor in today’s futures trading.

“Regarding U.S./China trade talks, sellers are selling in anticipation of ‘no deal’, and you can see that in the entire commodity and financial markets,” Ward says. “There was optimism for a trade deal last week, and that pendulum has completely swung the other way as we go into day one of trade talks. We have never encountered a trade war before, so to forecast prices or how we will trade would be foolish, but I can say with a great deal of certainty that U.S. producers are very nervous and praying for a resolution to a trade war that is really hurting them financially.”

“All while we are struggling with cool and wet conditions, which doesn’t add to financial optimism,” he adds. “Even for those producers having some success getting the corn crop planted, they report cool soil, slow emergence, and concerns about an outlook that remains below normal on temperature. Everyone in agriculture is going to be glued to the news feeds the next 48 hours.”

Another factor in the price decline, he says, is “an ‘improving’ forecast, which I say with a little hesitation, but it does look drier than it has looked this entire month. It is not completely dry for the next seven to 10 days, but it is drier, and gives producers some optimism about getting planting going. We are going to be significantly behind normal/average when we come in on Monday. I’d call the nation 35% planted, with significant delays still present in the eastern Corn Belt and South Dakota. I think Iowa had the best week and likely pushed to 50% complete and if there is a surprise on Monday, it is that they pushed further than that.” 

“In these areas of some planting success, and keep in mind, when I say success, this is still behind normal, but compared with other areas they are doing well – we are hearing of guys planting more corn acres,” Ward says. Beans have become such a depressing conversation for producers that if at all possible, guys are willing to plant a few more acres to corn. Particularly I am speaking about north-central Iowa, and south-central Minnesota. I say this confidently from growers we work with, but in the same sentence I am going to tell you there are producers in these areas that have yet to start planting, so we have a little bit of everything this year.” 

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In early trading Thursday, July corn futures are 6½¢ lower at $3.57¾.

July soybean futures are 11¼¢ lower at $8.16.  

July wheat futures are 8½¢ lower at $4.30½.

July soy meal futures are $1.80 a short ton lower at $291.10. July soy oil futures are .33¢ lower at 26.67¢ per pound.
 
In the outside markets, the NYMEX crude oil market is 44¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are down 274 points, or 1%.

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Wednesday’s Grain Market Review

DES MOINES, Iowa -- On Wednesday, the CME Group’s farm markets finish weaker.

At the close, July corn futures finished 2½¢ lower at $3.64; December corn futures ended 1½¢ lower at $3.82.
 
July soybean futures finished 3½¢ lower at $8.27¼; November soybean futures settled 2½¢ lower at $8.50¾.

July wheat futures closed ½¢ lower at $4.39.

July soy meal futures finished 30¢ per short ton lower at $292.90. July soy oil futures finished 0.10¢ lower at 27¢ per pound.

In the outside markets, the NYMEX crude oil market is 70¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 109 points higher.

Jason Roose, U.S. Commodities, says investors are digesting a lot of factors.

“Grains are testing last week’s support levels, as weather leans short-term positive. There remains a potential for a slow planting start, with cool wet weather. Also, Friday’s USDA Crop Report and U.S./China trade talks will be the markets’ driving force,” Roose says.

Al Kluis, Kluis Advisors, says the markets will be eyeing weather and trade news.

“Grain traders will continue to wait for further comments regarding trade discussions with China while watching storm systems work through parts of the Corn Belt,” Kluis told customers in a daily note.

Kluis added, “The six- to 10-day forecast right now has the attention of nearly every trader who participates in the grains. We could see fund managers make adjustments to short corn positions before the weekend if the wet pattern remains in the forecast.”

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Tuesday’s Grain Market Review

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

At the close, July corn futures finished 2¼¢ higher at $3.66½; December corn futures ended 1½¢ higher at $3.83¾.
 
July soybean futures ended ½¢ higher at $8.30¾; November soybean futures settled unchanged at $8.53.

July wheat futures finished 2¼¢ higher at $4.39.

July soy meal futures finished $3.40 per short ton lower at $293.20. July soy oil futures closed 0.03¢ lower at 27.10¢ per pound.

In the outside markets, the NYMEX crude oil market is 90¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 573 points lower.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says the farm markets are consuming a lot of news.

“Market is having a hard time which story to subscribe to, the delayed planting that has become a reality or fear that we could slap another round of tariffs on China. Likely a wait-and-see of the latter. Corn has good reason to move higher, but is held back by soybeans – same story line that has loomed over it all year. Corn feels like it is not carrying enough risk premium, and beans feel like they are now living in reality.”  

O’Connell adds, “I would expect that with WASDE on Friday and an announcement regarding tariffs, we could see some excitement end of week; moreover, Monday afternoon we will take a look again at planting progress – of which it feels like little progress will be made across much of the Corn Belt.”

Al Kluis, Kluis Advisors, says that the market’s technical factors are being watched, along with weather.

“The gap lower, yesterday, on the daily soybean chart is likely to result in an island bottom, if a trade deal gets done with China,” Kluis told customers in a daily note.

Kluis added, “Next week the six-year average corn planting pace nationwide is at 63%. Based on the current weather forecast, I doubt if that number is attainable. I would make a very early guess that planting progress can jump to 44% complete for the report released on Monday, May 13, 2019.”

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Monday’s Grain Market Review

On Monday, the ag markets felt pressure right through the close.

At the close,July corn futures finished 6½¢ lower at $3.64¾; December corn futures ended 5¾¢ lower at $3.82.
 
July soybean futures settled 12¢ lower at $8.30; November soybean futures ended 11¼¢ lower at $8.53.

July wheat futures finished ¾¢ lower at $4.37.

July soy meal futures closed $1.60 per short ton lower at $296.60. July soy oil futures closed 0.22¢ lower at 27.13¢ per pound.

In the outside markets, the NYMEX crude oil market is 92¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 62 points lower.

Jack Scoville, PRICE Futures Group, agrees that the markets face pressure from the news on China trade tariffs.

“It’s a Twitter kind of Monday. The futures moved to the lows overnight, due to the Twitter announcements about China. They then tested the lows, this morning, for the American crowd. China’s trade delegation still plans to come to the U.S. for this week’s meeting and that is supportive to the futures.  

Scoville adds, “Things could get real ugly around here, if China’s folks change their minds. Both sides need a deal, so I expect one sooner or later. Specs were knee-jerk sellers last night, been buying today. And the weather is still important with rains in the forecast for almost all week. Not much fieldwork will get done and for corn that is of increasing importance,” Scoville says.

Al Kluis, Kluis Advisors, says the market is falling due to President Trump’s announcement of raising tariffs on China.

“The pair of tweets on Sunday that President Trump would ramps up tariffs on more Chinese imports is taking the U.S., Chinese, and global stock and commodity markets sharply lower,” Kluis told customers in a daily note.

Kluis added, “Trump’s threats are all about trying to get the best deal possible. A deal will get done in late May or June.”

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