The farm markets finish mostly higher Friday

Harvest activity could tip the power to the bears.

On Friday, the CME Group’s farm markets settled mostly higher.

At the close, the Dec. corn futures finished 1¼¢ higher at $3.65½. March corn futures ended 1¢ higher at $3.73¼.
 
Nov. soybean futures settled 2½¢ higher at $10.02¾. January soybean futures closed 3¢ higher at $10.06¼.

Dec. wheat futures ended 5½¢ lower at $5.44½. 

Dec. soymeal futures finished $2.10 per short ton higher at $338.60. Dec. soy oil futures settled 0.41¢ higher at 32.82¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.08 per barrel lower at $40.23. The U.S. dollar is higher, and the Dow Jones Industrials are 259 points higher.

On Friday, private exporters reported to the USDA export sales of 100,000 metric tons of soybean meal for delivery to unknown destinations during the 2020/2021 marketing year.  

The marketing year for soybean meal began Oct. 1.

Bob Linneman, Kluis Advisors, says that the bulls are trying to hang onto the market’s strength.  

“New-crop soybeans fell under the $10 mark briefly during the trading session before closing the day just above the psychological support. December corn closed below the 20-day average for the first time since August 12. The encouraging factor for the bulls is that the summer high held as support. The weekly chart for both corn and soybeans have not taken out the prior week’s low, which is a good sign for the bull camp,” Kluis told customers in a daily note.   

He added, “Harvest pace in the U.S. should have progressed quickly this week. Along with that, we should expect some harvest selling pressure. Strong basis levels are encouraging farmers to haul to the elevator instead of storing in the bin.”

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Thursday’s Grain Market Review

On Thursday, The CME Group’s farm markets see strong demand get trumped by harvest activity.

At the close, the Dec. corn futures finished 5¢ lower at $3.63 1/2. March corn futures ended 5 1/4¢ lower at $3.72.
 
Nov. soybean futures settled 14 1/2¢ lower at $10.00 3/4. January soybean futures finished 15 3/4¢ lower at $10.03.

Dec. wheat futures closed 3/4¢ higher at $5.49 1/2. 

Dec. soymeal futures closed $8.10 per short ton lower at $336.50. Dec. soy oil futures finished $0.39 cent lower at 32.41¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.26 per barrel higher at $40.19. The U.S. dollar is lower, and the Dow Jones Industrials are 53 points higher.

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

Corn = 2.13 million metric tons vs. the trade’s expectations of between 1.0 mmt to 1.8 mmt. 

Soybeans = 3.19 million metric tons. vs. trade’s expectations of 2.0 mmt-3.0 mmt. Of that total, China bought 1.48 million metric tons.

Wheat = 351,000 mt. 

Soybean meal = 323,300 mt.

Bob Linneman, Kluis Advisors, says that the bears are gaining footing.  

“On Wednesday, soybeans initially held support at the 10-day average, but dipped below that line in the overnight trade. Corn prices are looking for support near the 20-day average while selling pressure in the soybean market continues to give the bears an upper hand. Harvest is ramping up in the U.S. and cash bids are strong in many areas. Commercial grain buyers need to secure bushels to fulfill the large orders that are booked for delivery before the end of 2020,” Kluis told customers in a daily note.   

He added, “If the trend of export sales continues to remain strong, then this pullback will likely find willing buyers. Grain buyers are also watching the U.S. dollar break out to the upside of its two-month trading range.”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets end lower.

At the close, the Dec. corn futures finished ¾¢ lower at $3.68. March corn futures settled 1¼¢ lower at $3.77¾.
 
Nov. soybean futures closed 5¼¢ lower at $10.14. January soybean futures ended 5¾¢ lower at $10.18½.

Dec. wheat futures closed 9¢ lower at $5.49. 

Dec. soymeal futures finished $3.60 per short ton higher at $344.60. Dec. soy oil futures closed 0.80¢ lower at 32.80¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.03 per barrel higher at $39.83. The U.S. dollar is higher, and the Dow Jones Industrials are 481 points lower.

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

  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 126,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

 
The marketing year for soybeans began Sept. 1.

Britt O’Connell, cash adviser for Commodity Risk Management Group, agrees that harvest activity will weigh on the markets.  

“Grains continue to retreat as we move into the start of harvest.  With weather forecasts looking amicable and early yield indications promising, it could be difficult for the bulls to hold the line. Technically both markets were carrying an overbought condition and due for a correction,” O’Connell says. 

Al Kluis, Kluis Advisors, says that the soybean market is showing signs of weakening.  

“Soybean prices continued to slide Tuesday after a washout trade to start the week. The new-crop corn chart is flirting with danger as the close on Tuesday was just below the 10-day average. The last significant close below this moving average was in early August. If the bears take out the Tuesday low and manage to close prices under the 10-day average, then it will signal a shift in momentum,” Kluis told customers in a daily note.   

He added, “With all of the new-crop soybean sales on the books, the logistical question of how to make it happen becomes a valid concern. If the exporters are unable to source the quantity of soybeans slated for export by the end of 2020, then there could be a squeeze on the November contract.”

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

At the close, the Dec. corn futures finished ½¢ lower at $3.69¼. March corn futures settled ½¢ lower at $3.78¾.
 
Nov. soybean futures ended 2¾¢ lower at $10.19½. January soybean futures finished 3¢ lower at $10.24¼.

Dec. wheat futures finished 3¼¢ higher at $5.58. 

Dec. soymeal futures ended $2.90 per short ton higher at $341.00. Dec. soy oil futures closed 0.60¢ lower at 33.60¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.24 per barrel higher at $39.55. The U.S. dollar is higher, and the Dow Jones Industrials are 100 points higher.

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

  • Export sales of 140,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
  • Export sales of 320,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 266,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year. 
  • Export sales of 264,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn and soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that the market is facing headwinds for the next week.  

“Rapid harvest progress will put pressure on the grain markets. The USDA weekly crop report on Monday afternoon showed corn ratings up by 2%, and soybean ratings improving by 1%. This was better than trade estimates. Corn harvest was reported at 8% complete, and nationwide soybean harvest was reported at 6%,” Kluis told customers in a daily note.   

He added, “With the warm dry weather forecasts for the next two weeks, this year’s soybean harvest may be at a record pace. This will create a limited opportunity for commercials to buy soybeans that are sold right off the combine, and may result in an early-harvest low.”

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Monday’s Grain Market Review

After a sharp rally, last week, the CME Group’s farm markets start this week in the slow lane.

At the close, the Dec. corn futures finished 8¾¢ lower at $3.69¼. March corn futures closed 8¼¢ lower at $3.79¾.
 
Nov. soybean futures finished 21¢ lower at $10.22½. January soybean futures closed 19¢ lower at $10.27¼.

Dec. wheat futures closed 20¾¢ lower at $5.54¼. 

Dec. soymeal futures settled $4.00 per short ton lower at $338.10. Dec. soy oil futures finished 0.94¢ lower at 34.20¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.77 per barrel lower at $39.34. The U.S. dollar is higher, and the Dow Jones Industrials are 851 points lower.

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

  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 132,000 metric tons of soybeans for delivery to Pakistan during the 2020/2021 marketing year.
  • Export sales of 171,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Peter J. Meyer, S&P Global Platts, head of grain and oilseed analytics, says that it’s not a good start for any market today, equities or commodities, so grains are along for the ride. 

“There are some fears that any sort of additional COVID stimulus will now take a back seat until the election, as elected officials turn their attention to a Supreme Court nominee. Without the stimulus, many markets, including oil, will be nervous. In grains and oilseeds specifically, if you include last week’s trading with the Commitments of Traders report, funds are now long everything, including wheat, into harvest – and that adds to the nervousness. Still a good demand market in soybeans, which has dragged up corn, but with the combines starting to roll and some speculative length in the market, it feels like a breather is required,” Meyer says.

Meyer added, “I would add that the two-week weather window is dry, which could increase the speed of harvest. Like almost everyone, farmers want 2020 to be over, the sooner the better.” 

Al Kluis, Kluis Advisors, says that the price trend is higher, for now.  

“China and commodity funds keep buying and farmers keep selling. With the huge long fund position in soybeans, the market is set up for a large correction when a price reversal develops. Until then, the trend is higher,” Kluis told customers in a daily note.   

He added, “The overnight markets dipped due to harvest pressure in the U.S. and improved weather forecasts for South America.”

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