Wheat leads the way Friday

USDA’s report on Thursday lacked strong market-friendly data.

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

At the close, the March corn futures finished 2¼¢ higher at $4.23¾. May corn futures ended 2¼¢ higher at $4.26½. 
 
January soybean futures closed 7¾¢ higher at $11.60¾. March soybean futures closed 7¼¢ higher at $11.66.

March wheat futures finished 18¢ higher at $6.14¾. 

Jan. soymeal futures closed $3.10 per short ton higher at $380.30.

Jan. soy oil futures closed 0.18¢ higher at 38.24¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.19 per barrel lower (-0.41%) at $46.59. The U.S. dollar is higher, and the Dow Jones Industrials are 41 points higher (+0.14%) at 30,040 points.

On Friday, private exporters reported to the USDA export sales of 130,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2020/2021 marketing year.

The marketing year for soybean cake and meal began Oct. 1.

Britt O’Connell, ever.ag, says that grain markets continue to find comfort in the same ranges that were traded prior to USDA’s WASDE report yesterday.  

“The USDA failed to provide the bulls with any new stories and as we move into a time of year when historically we’ve been rangebound; it seems this year could be more of the same. Wheat has found itself back toward the top end of its range with Russia announcing, this morning, that it is contemplating an export tax, which would be designed to keep more wheat domestically and provide a higher degree of food security internally,” O’Connell says.  

She added, “Things to watch as we move toward 2021 will be fund positioning. With the funds owning such massive longs in corn and soybeans, the question is will they be content to carry those into next year or are they looking to take profit on the 2020 books.”  

Brazil has been receiving very timely rains in much of its growing regions while Argentina still remains largely dry, O’Connell says.  

While CONAB has lowered Brazilian production expectations a mere .5 million metric tonnes, the USDA left that number untouched in this report.  

“Record planted acres are going to serve as some buffer should yield be ratcheted down in the future. Soon, northern Brazil will start to be able to more accurately estimate yields as we move into the flowering stage.  This time frame is much like our July/Aug rains in the U.S., and we know what that typically does for yields when we receive rains. The trade will keep a close eye on SA, but the weather pattern seems to be bringing more favorable rains to Brazil,” O’Connell says.  

Bob Linneman, Kluis Advisors, says that investors don’t see the USDA’s report as bullish enough. 

“The friendly number in the WASDE section of the report was for Wheat, which helped propel wheat 12¢ to 13¢ higher. However, many traders feel the Australian wheat crop is larger than this report suggests,” Linneman told customers in a daily note.     

He added, “The USDA report on Thursday was not as bearish as the reaction. The report was not bullish, which could be the problem. Bull markets need to be fed daily, and the grain bulls are very hungry as the export sales and South American weather are no longer aiding their case.”

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Thursday’s Grain Markett Review

On Thursday, the CME Group’s farm markets closed mostly lower, following the USDA Report that was not as bullish as traders had expected.

At the close, the March corn futures finished 2½¢ lower at $4.21¾. May corn futures settled 2½¢ lower at $4.24½. 
 
January soybean futures closed 5 3/4¢ lower at $11.52¾. March soybean futures finished 4¾¢ lower at $11.58½.

March wheat futures closed 13¼¢ higher at $5.96¾. 

Jan. soymeal futures closed $1.90 per short ton lower at $377.20.

Jan. soy oil futures finished 0.20¢ higher at 38.06¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.38 per barrel higher (+3.03%) at $46.90. The U.S. dollar is lower, and the Dow Jones Industrials are 24 points lower (-0.08%) at 30,043 points.

On Thursday, private exporters reported to the USDA export sales of 344,442 metric tons (13.6 million bushels) of corn for delivery to Mexico during the 2020/2021 marketing year.  

The marketing year for corn began Sept. 1.

Bob Linneman, Kluis Advisors, says that investors eye the December USDA report on Thursday. 

“The last few days we had seen heavy selling late in the session. This is often considered the time frame when funds will liquidate positions. We did not see that pattern continue on Wednesday. Either the funds are waiting to see what the USDA report says today, or they have exited all that they intend to exit. A strong close over moving averages should give the momentum back to the bull camp,” Linneman told customers in a daily note.     

He added, “From the recent highs to lows, corn fell 25¢ while soybeans fell 57¢. We often discuss prereport price moves as “baking in the reaction” to whatever the report is expected to be. In this case, the funds are expecting little to no change, which is bearish. We could see momentum shift back to the bulls once this report is out of the way.”

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

Corn = 1.36 million metric tons vs. the trade’s expectations of between 700,000 mmt. and 1.50 mmt. Unknown was the biggest buyer.

Soybeans = 737,000 metric tons. vs. trade’s expectations of 400,000 mmt. to 800,000 mt. 

Wheat = 616,500 mt.

Soybean meal = 163,600 mt.

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Wednesday’s Grain Market Review

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

At the close, the March corn futures closed 4¼¢ higher at $4.23¾. May corn futures settled 3½¢ higher at $4.26½. 
 
January soybean futures finished 12¾¢ higher at $11.58¾. March soybean futures finished 12¢ higher at $11.63½.

March wheat futures finished 13¼¢ higher at $5.83. 

Jan. soymeal futures finished $2.20 per short ton higher at $379.10.

Jan. soy oil futures closed 0.42¢ higher at 37.86¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.10 per barrel lower (-0.22%) at $45.50. The U.S. dollar is higher, and the Dow Jones Industrials are 139 points lower (-0.46%) at 30,034 points.

On Wednesday, private exporters reported to the USDA export sales of 257,071 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that investors eye the December USDA report on Thursday. 

“Traders do not expect any material change to the U.S. data; however, they are expecting to see some changes to the WASDE numbers. The weakness in the grains can be tied to the very quiet export markets over recent weeks. Corn exports have been getting most of the spotlight, but that is not enough to keep the entire grain complex rolling to new highs. Improved rainfall in the past few weeks has lessened some of the production concerns for areas in South America,” Kluis told customers in a daily note.     

He added, “The lack of fresh export sales for soybeans – combined with year-end approaching – has likely pushed some funds to book profits on long positions they have held for a few months.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets closed lower, pressured by a double-digit loss in the soybean prices.

At the close, the March corn futures finished 4 1/4¢ lower at $4.19 3/4. May corn futures finished 3 1/4¢ lower at $4.23. 
 
January soybean futures settled 12 3/4¢ lower at $11.45 3/4. March soybean futures finished 11¢ lower at $11.51 3/4.

March wheat futures settled 7 1/2¢ lower at $5.70. 

Jan. soymeal futures closed $5.40 per short ton lower at $376.90.

Jan. soy oil futures finished 0.59 of a cent lower at 37.44¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.10 per barrel lower (-0.22%) at $45.66. The U.S.

dollar is higher, and the Dow Jones Industrials are 161 points higher (+0.33%) 30,214 points.

Al Kluis, Kluis Advisors, says that investors are buying the market dips. 

“The rally back on Monday in the corn, soybean, and meal markets shows how end-users will step in on market corrections to get some forward coverage in place. The corn, soybean, and meal market will be well-supported on any setback,” Kluis told customers in a daily note.     

He added, “I am watching the low last week in the soybean market. Since the early-August low, the nearby soybean futures have put in the monthly low in the first week of the month. That makes last week’s low ($11.42) a key price to watch in the soybean market. For corn, the key price to watch for nearby corn is $4.10.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets started lower, turned higher and finished mixed.

At the close, the March corn futures settled 3½¢ higher at $4.24. May corn futures finished 3½¢ higher at $4.26¾. 
 
January soybean futures ended 4¼¢ lower at $11.58¼. March soybean futures closed 2½¢ lower at $11.62¾.

March wheat futures closed 2¢ higher at $5.77½. 

Jan. soymeal futures finished $3.20 per short ton lower at $382.30.

Jan. soy oil futures finished 0.38¢ lower at 38.03¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.39 per barrel lower (-0.84%) at $45.87. The U.S. dollar is lower, and the Dow Jones Industrials are 189 points lower (-0.63%) 30,031 points.

Al Kluis, Kluis Advisors, says that investors are watching global crop-weather events. 

“In the U.S. Globex overnight grain trade, prices are lower because of more rain in Brazil,” Kluis told customers in a daily note. “Weakness early this week in the corn market is setting up a good buying opportunity in the corn and soybean markets ahead of the USDA reports on Thursday. I think they will show a reduction in the U.S. ending stocks and more corn and soybeans going to China.”    

He added, “I am watching the lows made last week in corn and soybeans. After the huge August-to-November rally in the corn and soybean market, I expect more of a trading-range market to develop with resistance at the contract highs, and support at the lows made last week.”

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