Friday’s soybean market adds to the week’s 40¢ rally

China just keeps buying U.S. soybeans.

On Friday, the CME group’s soybean market continues its blowout week.

At the close, the Dec. corn futures finished 3¼¢ higher at $3.78¼. March corn futures closed 3½¢ higher at $3.87¾.
 
Nov. soybean futures ended 15¢ higher at $10.43½. January soybean futures closed 16¢ higher at $10.47.

Dec. wheat futures ended 18¼¢ higher at $5.75. 

Dec. soymeal futures closed $6.80 per short ton higher at $342.10. Dec. soy oil futures settled $0.28¢ higher at 35.14¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.05 per barrel lower at $40.92. The U.S. dollar is lower, and the Dow Jones Industrials are 278 points lower.

Jason Roose, U.S. Commodities, says that there is plenty of market support to go around.

“The grains continue to find support with active buying on a daily basis from China. Also, the weak dollar and unknown yields have corn approaching six-month highs and soybeans at two-year highs,” Roose says.

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

  • Export sales of 210,000 metric tons of corn received during the reporting period for delivery to China during the 2020/2021 marketing year.
  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • 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 corn and soybeans began Sept. 1; soybean meal Oct. 1.

Al Kluis, Kluis Advisors, says that investors are impressed with the demand for U.S. soybeans. 

“The soybean market has pushed to levels we were only dreaming of six weeks ago. Very impressive export sales in recent weeks have pushed estimates for U.S. carryout to much tighter levels, given the dry August in the U.S. A report released this week suggests that South America had to import soybeans (albeit a relatively small amount). There has not been much talk yet about what to expect in the USDA’s month-end Grain Stocks report. Last year, this report was a bullish surprise. Many traders were expecting a similar result this year, since basis levels for corn and soybeans have been getting tighter,” Kluis told customers in a daily note.   

He added, “The spike in trading volume for soybeans on Thursday was very noticeable. This spike either means we are seeing new momentum traders jump in on the long side, or those who were short are throwing in the towel in a large way.”

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Thurusday’s Grain Market Review

On Thursday, the CME Group’s farm markets weaken as a result of a broad-based sell-off.

At the close, the Dec. corn futures finished 3½¢ higher at $3.84. March corn futures ended 3¢ higher at $3.84.
 
Nov. soybean futures closed 17¼¢ higher at $10.28½. January soybean futures closed 16¢ higher at $10.31¼.

Dec. wheat futures finished 14¼¢ higher at $5.56¼. 

Dec. soymeal futures ended $9.60 per short ton higher at $335.30. Dec. soy oil futures closed 0.05¢ lower at 34.86¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.90 per barrel higher at $41.06. The U.S. dollar is lower, and the Dow Jones Industrials are 177 points lower.

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

  • Export sales of 264,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 120,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 360,500 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.

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

Corn = 1.60 million metric tons vs. the trade’s expectations of between 1.0 mmt and 1.9 mmt. 

Soybeans = 2.45 million metric tons. vs. trade’s expectations of 1.5 mmt to 2.8 mmt. Of that total, China bought 1.48 million metric tons.

Wheat = 336,000 mt. 

Soybean meal = 359,600 mt.

Al Kluis, Kluis Advisors, says that the soybean market is attracting new buyers. 

“It appears as though the soybean market found willing buyers on Tuesday evening. The softer close on Tuesday was the first close below the prior-day low since August 20. Bears were waiting for a chart signal like this before jumping in on the short side. However, there were plenty of willing buyers when prices got close to the 10-day average. Will we see further follow-through at new highs? Or will we see some profit-taking as harvest nears?” Kluis asks customers in a daily note.   

He added, “The aggressive rally in soybeans on Wednesday came after breaking under the prior two-day low during the overnight session. The chart posted an outside day and closed at contract highs. Was this new money flowing to the soybean market, or was it shorts throwing in the towel?”

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets get behind the rush higher of the soybean complex.

At the close, the Dec. corn futures closed 5¾¢ higher at $3.71¼. March corn futures finished 5½¢ higher at $3.81.
 
Nov. soybean futures ended 19¾¢ higher at $10.11¼. January soybean futures ended 19¾¢ higher at $10.15¼.

Dec. wheat futures closed 3¾¢ higher at $5.42¾. 

Dec. soymeal futures settled $6.50 per short ton higher at $325.70. Dec. soy oil futures closed $0.76¢ higher at 34.91¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.95 per barrel higher at $40.23. The U.S. dollar is higher, and the Dow Jones Industrials are 316 points higher.

On Wednesday, private exporters reported to the USDA export sales of 327,000 metric tons (12 million bushels) of soybeans for delivery to China during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Since June 1, China has booked 294.8 million bushels of 2020/21 soybeans, according to news reports.

Al Kluis, Kluis Advisors, says that investors are watching the pace of the corn and bean harvests.

“The grain markets set back on profit taking and some hedge pressure. Farmers in the eastern and southern Corn Belt are starting to deliver new-crop corn and soybeans,” Kluis told customers in a daily note.   

He added, “Watch the gaps on the nearby corn and soybean charts. The September-to-December corn gap has been filled. Now critical support for December Corn is at $3.60. For soybeans on the continuation chart, the gap is above the market at $10.19 where the September contract expired, as well as the gaps from last week at $9.85 and $9.75.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s soybean market is trading at the $10.00 per bushel level, as demand remains high and crop-weather concerns prevail.

At the close, the Dec. corn futures finished 3 1/2¢ lower at $3.66. March corn futures closed 3 1/4¢ lower at $3.75 1/2.
 
Nov. soybean futures ended 8¢ lower at $9.91 1/2. January soybean futures closed 7 1/2¢ lower at $9.95 1/4.

Dec. wheat futures ended 7 1/2¢ lower at $5.38 3/4. 

Dec. soymeal futures settled $2.80 per short ton lower at $319.20. Dec. soy oil futures closed $0.14 cent lower at 34.15¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.14 per barrel higher at $38.40. The U.S. dollar is higher, and the Dow Jones Industrials are 73 points higher.

Jack Scoville, PRICE Futures Group, says that today's soybean market is lower for a couple of reasons. 

“First, it is Tuesday and we often give back a part of the Monday rally or selloff on Tuesday.  Second, Hurricane Sally looks to miss the Delta and all of the beans and corn in the region.  Third, China bought maybe 4 cargos of soybeans instead of the 6 to 10 rumored yesterday," Scoville says. 

On Tuesday, 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 unknown destinations during the 2020/2021 marketing year.
  • Export sales of 120,000 metric tons of corn 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 corn basis price is narrowing.

“Large export sales of both corn and soybeans were announced again on Monday morning. The USDA weekly crop report on Monday afternoon showed corn ratings dropping by 1% and soybean ratings dropping by 2%. This was close to what the trade had expected,” Kluis told customers in a daily note.   

He added, “The sharp rally in corn basis levels shows that either last year’s corn crop was overstated, or that the usage of last year’s poor-quality corn was larger than expected. This sets up a possible surprise in the September Grain Stocks report at the end of this month.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets lean on the soybean complex to carry on last week’s rally.

At the close, the Dec. corn futures finished 1¢ higher at $3.69¾. March corn futures finished ¾¢ higher at $3.79.
 
Nov. soybean futures settled 3½¢ higher at $9.99. January soybean futures ended 4¢ higher at $10.03¼.

Dec. wheat futures closed 3¾¢ higher at $5.45¾. 

Dec. soymeal futures settled $2.60 per short ton lower at $322.00. Dec. soy oil futures closed 0.58¢ higher at 34.29¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.09 per barrel lower at $37.24. The U.S. dollar is lower, and the Dow Jones Industrials are 341 points higher.

Private exporters reported to the U.S. Department of Agriculture the following activity:

Program Announcement FAS-ESR-088-20, issued at 9:00 a.m. on August 27, 2020, which announced export sales of 140,000 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year has been corrected to reflect a change in destination. The corrected announcement is as follows:

  • Private exporters reported to the U.S. Department of Agriculture export sales of 140,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
  • Export sales of 350,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
  • Export sales of 106,000 metric tons of corn for delivery to Japan during the 2020/2021 marketing year.
  • Export sales of 129,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 318,000 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 investors are awaiting today’s USDA numbers at 11:00 a.m. CT.  

“Right now there is not a lot of deliverable corn or soybeans around, so they are squeezing the September corn and soybean contracts into the last day of trade... which is today,” Kluis told customers in a daily note.   

He added, “The USDA Crop Progress Report today will show corn ratings down by 1% and soybean ratings steady to 1% higher. Only the late-maturing soybeans (about 20% of the total soybean crop) will benefit from the September rain. In the next month, I will change my focus from U.S. weather to weather and crop planting progress in South America.”

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