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Friday’s wheat trade has retreated, closed slightly higher

The Dow dives after three sharply higher sessions.

INDIANOLA, Iowa -- On Friday, the CME Group’s farm markets end mostly higher.

At the close, the May corn futures finished 2 3/4¢ lower at $3.46 3/4. July corn futures ended 2 1/2¢ lower at $3.51 3/4.
 
May soybean futures closed 1 1/4¢ higher at $8.81 1/4. July soybean futures closed 1/2¢ higher at $8.85 1/4.

May wheat futures ended 2 1/4¢ higher at $5.71 1/2. 

May soymeal futures closed $0.20 per short ton higher at $323.10. May soy oil futures finished $0.35 cents higher at 26.85¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.80 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 649 points lower.

READ MORE: 3 Big Things Today, March 26, 2020

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

• Export sales of 163,290 metric tons of soybeans for delivery to Mexico during the 2019/2020 marketing year.

• Export sales of 114,048 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

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

Al Kluis, Kluis Advisors, says that investors will be watching ethanol plants’ pullback to determine corn market impact.     

“The recent plunge in the ethanol market – and ethanol plants cutting back – could have an effect on planted corn acres this spring,” Kluis told customers in a daily note. Keep a close eye on the new cases of COVID-19 over the weekend. If we see a surge of new cases and deaths, then this could cause pressure in the stock market, which would likely spill over into the grain markets.”

Kluis added, “Thursday was a ‘back and fill’ day for corn and soybeans. We have been seeing an uptick in export demand for the past few weeks. Strong weekly export sales yesterday helped support prices. However, the U.S. dollar got hit hard Thursday when Congress passed the $2 trillion stimulus package. That will eventually lead to an influx of cash in the U.S., causing the U.S. dollar to be under pressure. Long-term, this is beneficial for U.S. commodities.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets trade weaker. 

At the close, the May corn futures settled ¼¢ higher at $3.48¾. July corn futures finished ¾¢ higher at $3.54¼.
 
May soybean futures closed 1¼¢ lower at $8.80¼. July soybean futures closed unchanged at $8.84¾.

May wheat futures closed 11½¢ lower at $5.69. 

May soymeal futures closed $1.20 per short ton higher at $322.90. May soy oil futures settled 0.14¢ lower at 26.50¢ per pound.

READ MORE: 3 Big Things, March 26, 2020

In the outside markets, the NYMEX crude oil market is $1.59 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 1,004 points higher.

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

  • Corn = 1.89 million metric tons vs. the trade’s expectations of between 650,000 and 2.1 mmt. 
  • Soybeans = 904,300 metric tons vs. trade’s expectations of 400,000 to 850,000 mt. 
  • Wheat = 1.10 mmt. vs. the trade’s expectations of between 200,000 and 900,000 mt.
  • Soybean meal = 267,200 mt. vs. the trade’s expectations of 100,000 to 300,000mt.

Al Kluis, Kluis Advisors, says that corn futures got a little support from an export sale announcement.    

“Soybeans were under a little pressure, but soybean meal futures pulled back and wheat continues to find strength as wheat demand in the U.S. has picked up. All eyes will be on the Senate and the stimulus package. Grain prices will still be limited to the upside. The effects of COVID-19 will hang over the U.S. for a few more weeks, if not months,” Kluis told customers in a daily note.

Kluis added, “Russia suspended cereal exports for 10 days, and more ports in South America shut down due to COVID-19. The U.S. has a great opportunity to pick up some export demand.”

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Wednesday’s Grain Market Review

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

At the close, the May corn futures settled 1¼¢ higher at $3.48¾. July corn futures closed 1½¢ higher at $3.53.
 
May soybean futures closed 5¼¢ lower at $8.81¼. July soybean futures settled 2¾¢ higher at $8.84¾.

May wheat futures closed 18½¢ higher at $5.80. 

May soymeal futures ended $10.40 per short ton lower at $321.70. May soy oil futures closed 0.09¢ higher at 26.64¢ per pound.

READ MORE: 3 Big Things Today March 25, 2020

In the outside markets, the NYMEX crude oil market is $0.80 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 1,181 points higher.

Al Kluis, Kluis Advisors, says wheat and soybean complexes lead the grain markets.    

“Wheat export business to China was a welcome sight for the bull camp. Will we see another round of purchases announced again this week? Soybean bulls are starting to run into resistance on the charts. With the big USDA quarterly Grain Stocks and Prospective Plantings Report due next Tuesday, will traders look to book some profits ahead of this traditionally volatile report?” Kluis asked customers in a daily note.

Kluis added, “Traders are hopeful that any more news regarding port closings in South America will lead to export sales announcements for the U.S.”

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

• Export sales of 138,000 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year 

• Export sales of 20,000 metric tons of soybean oil for delivery to South Korea during the 2019/2020 marketing year 

The marketing year for corn began September 1; soybean oil began October. 1.

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Tuesday’s Grain Market Review

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

At the close, May corn futures finished 3¾¢ higher at $3.47¾; July corn futures settled 2½¢ higher at $3.52.
 
May soybean futures ended 2¾¢ higher at $8.86¾; July soybean futures closed 2¢ higher at $8.87¾.

May wheat futures closed 1¢ lower at $5.61¼. 

May soy meal futures finished $1.50 per short ton lower at $332.10. May soy oil futures closed 0.41¢ higher at 26.55¢ per pound.

In the outside markets, the NYMEX crude oil market is 57¢ per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 2,112 points higher.

Al Kluis, Kluis Advisors, says investors are watching ethanol production drop and the strike possibilities in South America.    

“With many ethanol plants closing, corn has more downside risk than soybeans over the next 60 days,” Kluis told customers in a daily note. “Watch cash basis bids for soybeans. Will they continue to improve? The meal market is exploding higher as more ethanol plants shut, reducing the supply of DDGs. The threat of a port strike in both Argentina and Brazil has also been positive for nearby meal and soybean prices. If you use options, this is a time to get some cash soybeans sold. Get some cash flow into your farm and replace it with call options.”

Kluis added, “Gasoline futures closed down 19¢ (at one time yesterday, gasoline traded down to 37¢ a gallon), and ethanol closed down 10¢ per gallon. Even with the sell-off in the energy and stock markets, the wheat and soybean markets closed higher, while corn was about unchanged.”

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Monday’s Market Review

On Monday, the CME Group’ farm markets shoot mostly higher.

At the close, May corn futures finished ¼¢ lower at $3.43¾; July corn futures closed unchanged at $3.49½.
 
May soybean futures settled 21½¢ higher at $8.84; July soybean futures finished 20¾¢ higher at $8.85¾.

May wheat futures closed 23¼¢ higher at $5.62¼.

May soy meal futures finished $8.40 per short ton higher at $333.60. May soy oil futures closed 0.50¢ higher at 26.14¢ per pound.

In the outside markets, the NYMEX crude oil market is 5¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 633 points lower.

Al Kluis, Kluis Advisors, says investors are watching to see whether the South American port strikes will benefit U.S. bean prices.    

“The potential walk-out of workers at the ports in Argentina and then Brazil later this week will create huge near-term demand for U.S. soybeans and soybean meal,” Kluis told customers in a daily note.

Kluis added, “Will the workers at the grain exporting terminals in Argentina and Brazil refuse to go to work? If so, then the May contracts of corn, soybeans, and meal will rally compared with the July and new-crop contracts.”

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