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Friday’s Farm Markets Reverse to Close Mostly Higher

The U.S. dollar stays lower.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets just can’t get any buy-in to move up.

At the close, the May corn futures finished 2¾¢ lower at $3.73. July futures ended 2¢ higher at $3.81½.
 
May soybean futures closed 1¼¢ higher at $9.11½. July soybean futures ended 1½¢ higher at $9.25½.

May wheat futures ended 2¼¢ lower at $4.57¼.

May soymeal futures closed 1.40 per short ton higher at $307.40. May soy oil futures settled 0.01¢ lower at 30.24¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.42 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 120 points higher.

Al Kluis, Kluis Advisors, says that investors remain leery.

“We are finally in delivery of March corn, so look for a near-term low pretty soon. The market still remains a bit uneasy since we still do not have a trade deal done with China. The money feels like it wants to remain on the sidelines,” Kluis told customers in a daily note.

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Thursday's Grain Market Review

On Thursday, the CME Group’s farm markets have not received any help from export sales news.

At the close, the May corn futures finished 3¢ lower at $3.70¾. July futures ended 2¾¢ lower at $3.79.
 
May soybean futures closed 6½¢ lower at $9.10¾. July soybean futures finished 6½¢ lower at $9.24.

May wheat futures settled 7¼¢ lower at $4.59½.

May soymeal futures closed 3.20 per short ton lower at $306.00. May soy oil futures ended 0.13¢ higher at 30.25¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.30 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 43 points lower.

Jack Scoville, PRICE Futures Group, says that the markets ignored the strong export sales.

“Export sales were great on all markets and should have helped. But there is still a lot of China uncertainty and Trump walked out on North Korea’s Kim, so maybe a little more uncertainty with China,” Scoville says.  

Scoville added, “The funds are doing the selling, not seeing any cash moving. Going to be real cold so winterkill possible in wheat and no one going to sell. I think we can rally a bit tomorrow and maybe into next week wth the change of the month.”

On Thursday, the USDA’s Weekly Export Sales Report strong corn, soybean, and wheat figures.

  • Corn = 1.35 million metric tons vs. the trade’s expectations of between 700,000 and 1,300,000 mt.
  • Soybeans = 2.196 mmt. vs. the trade’s expectations of between 600,000 and 1,200,000 mt.
  • Wheat = 537,400 mt. the trade’s expectations of between 200,000 and 600,000 mt.
  • Soybean meal = 152,600 mt. vs. the trade’s expectations of between 50,000 and 350,000 mt.

Separately Thursday, private exporters reported to the U.S. Department of Agriculture the following activity:

  • Export sales of 168,000 metric tons of corn for delivery to Mexico during the 2018/2019 marketing year.
  • Export sales of 133,000 metric tons of corn for delivery to South Korea during the 2018/2019 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that wheat market is still a drag on corn.

“Lately the wheat market has been a drag on the corn and soybeans but now it feels like the funds just want to be sellers of corn futures. We still remain choppy as the market patiently awaits a trade deal between the U.S. and China,” Kluis told customers in a daily note.

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets finished lower, after all of them started the trading day higher.

At the close, the March corn futures finished 2½¢ lower at $3.63¾. May futures ended 2¼¢ lower at $3.73¾.
 
March soybean futures closed ¼¢ lower at $9.03½. May soybean futures settled ¼¢ lower at $9.16¾.

May wheat futures closed 1½¢ lower at $4.66¾.

May soymeal futures ended 1.90 per short ton higher at $309.20. May soy oil futures closed 0.28¢ lower at 30.12¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.44 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 55 points lower.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that the corn market has suffered yet another day of losses with May corn besting key support at $3.75 per bushel.

“A close below this level could open the door to more fund selling and a test of $3.63, the May lifetime contract low,” O’Connell says.

Beneficial rains continue to fall in Brazil, keeping the second corn crop in good shape, he says.

“Beans have managed to tread water and stay in positive territory today, despite corn’s move lower. An FC Stone survey of producers pegged corn acreage at 91.2 million acres vs. the recent USDA estimate of 92 million. This same survey had soybean acres estimated at 87.5 million acres, well over the USDA Outlook board’s estimate of 85 million acres. If this continues to hold and play out long term, this could prove to be very interesting for the corn market,” O’Connell says.

“Pretty quiet day otherwise. Crude has had a nice day, rebounding from comments President Trump made about the world not wanting high priced oil – OPEC seems to want to prove his comments wrong. Fat cattle are testing very key resistance at the 130 level. Harsh winter conditions have been tough on feedlots and cattle struggling to gain weight. This has widened the spring/summer fat cattle spread,” O’Connell says.

Al Kluis, Kluis Advisors, says that wheat market is oversold, finding strength.

“Momentum indicators are extremely oversold in wheat. We may see the tide turn in wheat after the March contracts enter delivery notice,” Kluis told customers in a daily note.

Kluis added, “Many wheat contracts hit new contract lows this week. Once the tides turn higher in wheat, it should help corn find strength. Closing above the prior two-day high is an important sign to suggest a change in trend is possible.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets closed lower.

At the close, the March corn futures finished 4¼¢ lower at $3.66. May futures are 4¢ lower at $3.76.

March soybean futures closed 8¢ lower at $9.03¾. May soybean futures ended 8¢ lower at $9.17.

May wheat futures finished 4¼¢ lower at $4.68¼.

May soymeal futures closed 2.10¢ per short ton lower at $307.30. May soy oil futures ended 0.28¢ lower at 30.40¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.01 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 5 points lower.

Al Kluis, Kluis Advisors, says the grain market is pulling farm markets lower.

“The continued weakness in the wheat market (several contracts fell to new contract lows on Monday) is pressuring corn prices as well,” Kluis told customers in a daily note.

Kluis added, “Will the corn market and wheat market bottom in the first delivery days on the March contract? That is a key seasonal time that I watch for a possible change of trend and low in the corn and wheat markets.”

On Tuesday, private exporters reported to the U.S. Department of Agriculture export sales of 120,000 metric tons of soybeans for delivery to Mexico. Of the total, 48,000 metric tons is for delivery during the 2018/2019 marketing year, and 72,000 metric tons is for delivery during the 2019/2020 marketing year.

The marketing year for soybeans began Sept. 1.

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Monday’s Grain Review

On Monday, the buyers are into the CME Group’s soybean market.

At the close, the March corn futures finished 4¾¢ lower at $3.70½. May futures closed 4½¢ lower at $3.80.
 
March soybean futures ended 1½¢ higher at $9.11¾. May soybean futures closed 1¼¢ higher at $9.25.

May wheat futures ended 19¢ lower at $4.72¾.

May soymeal futures closed unchanged at $309.40. May soy oil futures finished 0.17¢ lower at 30.68¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.81 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 112 points higher.

On Monday, private exporters reported to the USDA export sales of 279,400 metric tons of corn for delivery to Mexico. Of the total, 88,500 metric tons is for delivery during the 2018/2019 marketing year and 190,900 metric tons is for delivery during the 2019/2020 marketing year.
 

The marketing year for corn began September 1.

Jack Scoville, PriceGroup senior market analyst, says that the soybean market is enjoying the purchase of more as a goodwill gesture by the Chinese.

“But none of these markets are really all that impressive in response to the tariff being pushed back. People complain that there is no timeline put on any of this, and we also know that the hardest issues, intellectual property protections and Chinese economic reforms, are still to be negotiated,” Scoville says.  

He adds, “So not the biggest reaction in the world, as this could all fall apart. I personally think Trump needs a deal as much as the Chinese, so some kind of deal will emerge. Wheat is incredible, with no real reason to sell it as the exports were strong today and the data on Friday was not as bad as it could have been.” 

“Tough day. The wheat in the world is not that good, dollar down a touch and wheat in the toilet. Corn and beans should be better given the news, although the exports were not all that strong, but even so, given the trade deal news we should be better off than we are,” Scoville says.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that the markets’ overnight gains have dwindled into midsession.

“Beans have managed to keep its head into positive territory – so far today. Good news by way of trade talks with China gave the market an initial lift, pushing corn and beans to the top end of the range, only to give it back now,” O’Connell says.

On Thursday, China said that it could possibly, maybe, potentially commit to purchasing 30 billion in U.S. ag products, O’Connell says.

“Of course, this is everything from corn and beans to fruit and wine. On Friday late afternoon, the Chinese committed to purchasing 10 mmt of U.S. soybeans with no specific delivery time frame defined. If they hold to typical buying patterns, these will likely be new-crop bushels delivered this fall,” O’Connell says.

On Sunday evening, President Trump announced that the U.S. would not be imposing the next round of tariffs that were due to go in effect on March 1, citing positive trade talks.

“The reality of burdensome supplies of soybeans seems to take center stage each time the market rises back to the top end of the range. With no other news to trade, it’s hard to see the market moving outside of this current range,” O’Connell says.

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