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Wheat Closes Lower on Poor Export Sales; Beans, Corn Finish Higher

Export sales of wheat hit six-week low.

Wheat futures closed lower on Friday, the fifth-straight decline, while corn rose and soybeans barely held gains.

Export sales of wheat for delivery in the grain’s marketing year that started on June 1 were reported at 239,800 metric tons, down 70% from the previous week and 49% from the average, according to the U.S. Department of Agriculture. That marks the lowest amount in six weeks, government data show. 

Soybeans finished up a tick as investors weigh declining crop conditions against an ongoing trade war with China that shows no signs of ending anytime soon. Futures of the oilseeds declined almost 40¢ this week. Prices have been falling on increased production estimates and favorable growing weather in the U.S. The Department of Agriculture said earlier this month that it expects soybean output at 4.586 billion bushels on yields of 51.6 bushels an acre. 

Ending stocks in the 2017-2018 marketing year are forecast to jump to 785 million bushels from 430 million bushels the prior year, the government said. 

Wheat for December delivery closed 6¾¢ lower on Friday at $5.35 a bushel on the Chicago Board of Trade while Kansas City futures lost 9¼¢ to $5.45¼ a bushel. 

Soybean futures for November delivery rose ½¢ to $8.54½ a bushel on the Chicago Board of Trade. Soy meal futures lost 40¢ to $316.10 a short ton and soy oil gained 0.13¢ to 28.50¢ a pound.

December corn futures gained 2¢ to $3.63 a bushel.

In the outside markets, West Texas Intermediate and Brent futures both rose 1.1%, the U.S. dollar plunged 0.6%, and the Dow Jones Industrial Average was up 0.5%. 

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Thursday’s Grain Market Review

DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets can’t find their way out of the bearishness hovering over the trade.

At the close, the September corn futures settled 5¾¢ lower at $3.46¾. December futures settled 5¾¢ lower at $3.61.

September soybean futures finished 16¢ lower at $8.42¼. November soybean futures closed 16¼¢ lower at $8.54.

December wheat futures closed 3½¢ lower at $5.41¾.

December soymeal futures finished $6.70 per short ton lower at $316.50. December soy oil futures closed 0.19¢ lower at 28.37.

In the outside markets, the NYMEX crude oil market is $0.04 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 57 points lower.

Jason Roose, U.S. Commodities analyst, says that there is too much trepidation about the upcoming harvest.

“A lot of news in the market the last few weeks, and most of it is supply bearish to the grain prices. Also, at this stage investors are not willing to add any risk premium with harvest around the corner and large yields being reported this past week on both corn and soybeans,” Roose says.

Al Kluis, Kluis Advisors, says the markets face some headwinds.

“Confirmation of the huge U.S. corn and soybean yields across the Midwest has the pressure mounting on prices. We are very close to getting a trade deal done with Mexico. However, the market seems to be more concerned with the increasing soybeans stocks in the U.S. and world,” Kluis stated in a daily note to customers. 

Jason Roose

On Thursday, the USDA released its Weekly Export Sales Report showing stronger soybean exports than expected, while corn sales were within expectations.

  • Corn = 1.227 mmt. vs. the trade’s expectations of between 900,000 and 1,500,000 metric tons
  • Soybeans = 1.30 mmt. vs. the trade’s expectations of between 500,000 and 900,000 mt.
  • Soybean meal = 321,800 mt. vs. the trade’s expectations of between 150,000 and 400,000 mt.
  • Wheat = 239,800 mt. vs. the trade’s expectations of between 500,000 and 850,000 mt.

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s soybean complex is the downside leader.

At the close, the September corn futures finished 7¼¢ lower at $3.52 1/2. December futures ended 7 1/2¢ lower at $3.66¾.

Nov. soybean futures settled 15¾¢ lower at $8.70¼. January soybean futures finished 15 1/2¢ lower at $8.83¼.

December wheat futures finished 2 1/2¢ lower at $5.45¼.

December soymeal futures closed $4.00 per short ton lower at $323.20. December soy oil futures ended 0.39¢ lower at 28.56.

In the outside markets, the NYMEX crude oil market is $2.06 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 83 points lower.

Ray Grabanski, Progressive Ag analyst, says that investors are watching the progress of the U.S./China trade tariff talks.

“News the past week is that China is sending mid-level negotiators in late August to the U.S. to work out a framework for Trump and Xi to meet in November – hopefully to resolve the trade dispute with China. Both leaders are under pressure to come to some agreement, but the proof is in the pudding,” Grabanski says.

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets weakened, with wheat the downside leader.

At the close, the September corn futures closed 2¼¢ lower at $3.59¾. December futures finished 2¼¢ lower at $3.74½.

September soybean futures closed 7¼¢ lower at $8.74½. November soybean futures closed 7¼¢ lower at $8.86.

December wheat futures ended 14¾¢ lower at $5.47¾.

December soy meal futures closed $3.30 per short ton lower at $324.90. December soy oil futures finished 0.05¢ higher at 28.59.

In the outside markets, the NYMEX crude oil market is $0.82 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 92 points higher.

On Tuesday, the USDA announced fresh soybean product sales.

Private exporters reported to the U.S. Department of Agriculture export sales of 250,000 metric tons of soybean cake and meal for delivery to unknown destinations during the 2018/2019 marketing year. The marketing year for soybean cake and meal began October 1.

Mike North, Commodity Risk Management Group analyst, says that questions around Russian wheat export limitations have wheat prices on defense.  “Additionally, Russian exporters are ramping up current sales to get ahead of any such provisions. This has U.S. markets softer in an effort to remain competitive. Softer prices there are tugging corn lower as it competes for space in the ration,” North says.  

Also, annual crop tour results, this week, are supporting large USDA projections, even with the normal seasonally declining crop ratings.”

North adds, “Soybean markets are softer as doubts grow about the November discussions with the Chinese.  Too many times this year, hopes have been shattered as new developments in the dialogue moved the football further from the end zone.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets lean on the soybean complex for support.

At the close, the September corn futures finished 2 1/4¢ lower at $3.62. December futures ended 2 1/4¢ lower at $3.76 1/2.

Sep. soybean futures closed 1/2¢ higher at $8.93 1/4.  November soybean futures settled 3/4¢ higher at $9.05 3/4.

September wheat futures closed 17 1/4¢ lower at $5.62 1/2.

Sept. soymeal futures finished $1.90 per short ton lower at $328.20. Dec. soy oil futures closed 0.32¢ higher at 28.88.

In the outside markets, the NYMEX crude oil market is $0.59 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 92 points higher.

Al Kluis, Kluis Advisors, says that investors are optimistic about planned talks on trade tariffs this week between the U.S. and China.

"The US and China are in serious talks," Kluis stated in a daily note to customers. The soybean market and the stock market in China are both trading higher."

Jason Roose, U.S. Commodities, agrees that the news of upcoming trade talks with the U.S. and China is peaking buyers’ interest.

“Grains are mixed today with large trading ranges. The soybean futures prices are cautiously higher on news of optimistic trade talks with China. Corn is lower, due to harvest nearing with record yields anticipated.”

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