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Corn futures close higher

World price action hits wheat.

Des Moines, Iowa -- At the close of Friday’s trading, soybeans settled lower with corn closing higher.                      

March corn futures closed 1¾¢ higher at $3.81¼. May corn settled 1¾¢ higher at $3.86½.
 
March soybean futures ended 3¾¢ lower at $8.72½. May soybean futures were 3¾¢ lower at $8.86¾.

March wheat futures closed 6¾¢ lower at $5.53¾.

March soymeal futures closed $0.50 per short ton higher at $291 per short ton. March soy oil futures settled 0.69¢ lower at 29.94¢ per pound.

“We are firm in the corn and only a little lower in the beans,” says Jack Scoville, PRICE Futures Group senior analyst. “Wheat is taking more of a hit on weaker world price action. There is really not all that much going on, and I think that is the point. There is nothing around to push prices up or down, so mixed we are. Funds are sellers everywhere; the commercials scaled down buying.”

Mike North, president of Commodity Risk Management Group, adds, “The soybean market that has slipped all month long continues to edge lower again today. However, keep in mind that in the last three flips of the calendar page, prices have begun sharp movement in the opposite direction. Technical indicators are becoming supportive and may invite additional fund activity. After a week of downward pressure led by fears surrounding coronavirus, nearby March corn is finding support against a five-month trend line that has launched three separate rallies already in January. With month end, look for chart traders to use this as a potential opportunity to add length.”

In the outside markets, the NYMEX crude oil market is $0.76 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 554 points lower.

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Des Moines, Iowa -- At midsession Friday, corn futures are higher.

During late morning trading, March corn futures are up by 2¼¢ at $3.81¾. May corn is 2½¢ higher at $3.87¼.
 
March soybean futures are 1¾¢ lower at $8.74½. May soybean futures are 1¾¢ lower at $8.88¾.

March wheat futures are 3¢ lower at $5.57½.

March soymeal futures are $0.50 per short ton higher at $292 per short ton. March soy oil futures are 0.47¢ lower at 30.16¢ per pound.

“Grains are mixed today in oversold technical territory as uncertainties continue to mount with China on multiple issues – will the coronavirus news be dialed in as producers limit selling?” says Jason Roose of U.S. Commodities. “A weaker U.S. dollar will make U.S. grains more competitive for stronger exports.”

In the outside markets, the NYMEX crude oil market is $0.74 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 522 points lower.

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Des Moines, Iowa -- In early trading Friday, grain futures are down slightly even as the stock market reacts negatively to the coronavirus scare.

March corn futures are down by ½¢ at $3.79; May corn is ¼¢ lower at $3.84½.

March soybean futures are 2¾¢ lower at $8.73½; May soybean futures are 3¢ lower at $8.87½.

March wheat futures are ¼¢ lower at $5.60¼.

March soy meal futures are 50¢ per short ton lower at $291. March soy oil futures are 0.38¢ lower at 30.25¢ per pound.

In the outside markets, the NYMEX crude oil market is 30¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 272 points lower.

“So far this week, we have been under pressure for nearby corn futures,” says Al Kluis of Kluis Commodity Advisors. “We have support at $3.75¼, however we still have a small gap still left on the chart from when the December corn futures went off the board and we rolled to the March futures. We would need a trade down to $3.74½ to fill this gap. If we finish off the week filling the gap, then we could come into next week looking to rally. Resistance would be up around the $3.94 area on nearby corn futures.”

He’s also watching corn basis levels.

“With poor ethanol margins and China on holiday break (and dealing with coronavirus), exports have been a bit stagnant,” he says. “We could see basis levels soften up over the next few weeks on corn.”

“There is just no end in sight for coronavirus. With so many unknowns, traders are busy reducing their risk in most commodities,” he says. “Could this have a significant impact on Chinese and world economies? The World Health Organization has declared an emergency status for coronavirus, so that will likely keep traders as sellers of commodities.” 

On Friday, USDA's Foreign Agricultural Service reported sales activity for South Korea--optional origin sales of 134,000 metric tons of corn for delivery to South Korea during the 2019/2020 marketing year. An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.

The marketing year for corn began September 1. 

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Thursday’s Grain Market Review

DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets continue to be plagued by outside forces.

At the close, March corn futures finished 4¾¢ lower at $3.79¾; May corn futures settled 4¾¢ lower at $3.84¾.
 
March soybean futures settled 16¾¢ lower at $8.76¼; May soybean futures ended 16½¢ lower at $8.90.

March wheat futures settled 1¾¢ lower at $5.60½.

March soy meal futures closed $4.60 per short ton lower at $291.50. March soy oil futures ended 0.89¢ lower at 30.63¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.45 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 106 points lower.

Darin Fessler, Lakefront Futures and Options, says the soybean market’s hard move lower has to do with investors worrying about the spread of the coronavirus.

“Fears about the coronavirus and how it could impact the future demand story about soybeans have the market lower. Brazil continues to harvest, and a big crop is there if the country can get it out. Technically, the chartists are watching a break, following the gap fill of $8.78¾,” Fessler says.

Al Kluis, Kluis Advisors, says the whole commodity complex feels a bit jittery.   

“Much of China is taking its New Year Lunar holiday and dealing with the potential effects of coronavirus. Seasonally, this is a slower time of the year for grain prices. Expect rallies to be hard to come by and hard to support,” Kluis stated in a daily note to customers.

Kluis added, “Nearby soybeans rallied a little over 60¢ from the low of $8.88¼ (December 12) to our $9.49 high (January 2). Since then, nearby soybeans have taken back the entire +60¢ rally and found support at $8.88¼ earlier this week. This gives us a double bottom. If the double bottom support does not hold, then we should find support at $8.67½.”

On Thursday, private exporters reported to the USDA export sales of 30,000 metric tons of soybean oil for delivery to Egypt during the 2019/2020 marketing year.

The marketing year for soybean oil began October 1.

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

  • Corn: 1.37 million metric tons (mt) vs. the trade’s expectations of between 500,000 and 1.2 mmt
  • Soybeans: 471,700 mt vs. the trade’s expectations of 400,000 and 1.2 mmt
  • Wheat: 647,300 mt vs. the trade’s expectations of between 200,000 and 700,000 mt
  • Soybean meal: 438,800 mt vs. the trade’s expectations of 200,000 and 500,000 mt

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets extend this week’s losses.

At the close, March corn futures finished 2¾¢ lower at $3.84; May corn futures ended 2¾¢ lower at $3.89¼.
 
March soybean futures settled 2¢ lower at $8.93; May soybean futures closed 2¢ lower at $9.07.

March wheat futures closed 7¾¢ lower at $5.62.

March soy meal futures closed $1.50 per short ton lower at $296.10. March soy oil futures finished 0.06¢ higher at 31.52¢ per pound.

In the outside markets, the NYMEX crude oil market is 28¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 160 points higher.

Al Kluis, Kluis Advisors, says the bulls want to test the soybean 10-day moving average near $9.12 on the March contract, something that hasn’t happened since January 2, 2020.   

“Corn futures were able to rebound on Tuesday and fill the gap from the lower start to the week on Sunday. Soybeans and wheat were unable to attract the same buying momentum as corn and settled the day lower. The lack of new export sales may limit any rally the soybean bulls are able to put together, even though prices are over 70¢ off the January 2 high,” Kluis stated in a daily note to customers.

Kluis added, “Soybean prices have filled Sunday’s gap on the charts. If soybean bulls can keep pushing higher, then will we see corn and soybeans follow suit? Or will we see some spreading, where traders buy soybeans and sell corn and/or wheat?”

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Tuesday’s Grain Market Review

On Tuesday, the corn market turned higher, soybeans trimmed losses.

At the close, March corn futures finished 6¢ higher at $3.86½; May corn futures settled 5¼¢ higher at $3.92.
 
March soybean futures closed 2½¢ lower at $8.95; May soybean futures ended 2¢ lower at $9.09.

March wheat futures ended 2¼¢ lower at $5.69.

March soy meal futures closed 20¢ per short ton lower at $297.60. March soy oil futures settled 0.06¢ lower at 31.46¢ per pound.

In the outside markets, the NYMEX crude oil market is 45¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 257 points higher.

Jack Scoville, PRICE Futures Group, says soybeans are still feeling the coronavirus and demand for soybeans could be hit if the outbreak gets much more serious.

“However, corn really went down in sympathy and not on its own yesterday so is able to recover today. China never has been a big buyer of U.S. corn, so the direct effect of the virus is small. There could be some lost ethanol demand due to the lower crude oil and products’ prices but not much on sales to China. Plus, even though South America might have lot of corn later this year, it does not really have it now, unlike the beans that are getting harvested as we speak. Ukraine does, but it is a minor player in corn overall. So, corn is able to bounce while beans remain under pressure a little bit more,” Scoville says.

On Tuesday, private exporters reported to the USDA export sales of 124,355 metric tons of corn for delivery to Mexico during the 2019/2020 marketing year.
 
The marketing year for corn began September 1.

Al Kluis, Kluis Advisors, says investors still want to see what impact the coronoavirus will have around the world.   

“The primary reason for yesterday’s losses are unknowns. Reasons given were ones like coronavirus. How will it impact global economies? It is too early to say. Grain bulls are still waiting to see large export sales to China,” Kluis stated in a daily note to customers.

Kluis added, “The announcement on Monday that China purchased wheat from Australia, Canada, and France is not what the grain bulls wanted to see after the Phase One signing. Wheat prices look susceptible to a quick slide lower if we see another headline like this.”

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close lower, off daily lows.

At the close, March corn futures finished 6¾¢ lower at $3.80; May corn futures ended 6¢ lower at $3.86½.
 
March soybean futures settled 4¾¢ lower at $8.97½; May soybean futures settled 4¾¢ lower at $9.11.

March wheat futures closed 1¼¢ lower at $5.72¼.

March soy meal futures finished 50¢ per short ton lower at $297.80. March soy oil futures settled 0.50¢ lower at 31.52¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.22 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 354 points lower.

Al Kluis, Kluis Advisors, says investors are keeping a close eye on the spreading of the coronavirus around the world.   

“Traders are trying to assess how the contagious coronavirus will impact economies around the globe. If we continue to see new cases pop up across the U.S., the markets will likely not handle that news favorably,” Kluis stated in a daily note to customers.

Kluis added, “Soybean prices are nearing the lows scored in early December. Momentum indicators are approaching the same levels seen when that low was placed. Any pressure in the outside markets could keep the bulls on the sidelines.”

Louise Gartner, Spectrum Commodities, says short term, the wheat market could remain under pressure.

“I look for wheat to get a bit more pressure in the near term, but the strong seasonal trend could bring prices back to this week’s highs during the first half of February. Considering the strong sell signal from this week’s reversal down, a test of those recent highs is likely to stall the market again,” Gartner says.

She added, “The normal seasonal pattern is for wheat to rally during most of January and peak around the February crop report. So far, price action has followed the seasonal patterns and look to continue that price action for the near future.”

“As we move into late March/early April, the market’s attention will turn to new crop. With hard red winter acres lower, there is little wiggle room for yield losses. Soft red wheat acres were higher, and odds are good that we won’t experience the brutal rains and acreage/yield losses like last year,” Gartner says.

On Monday, private exporters reported to the USDA export sales of 111,252 metric tons of corn for delivery to Japan during the 2020/2021 marketing year.
 
The marketing year for corn began September 1.

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