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Corn, soybeans’ weekly losses deepen Thursday

Corn closes 12¢ lower.

DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets close weaker.

At the close, the March corn futures finished 12¢ lower at $3.75¼. May corn futures closed 11½¢ lower at $3.82¾.
 
March soybean futures settled at 4¾¢ lower at $9.24¼. May soybean futures ended 4½¢ lower at $9.37½.

March wheat futures closed 8¢ lower at $5.65.

March soymeal futures finished $0.50 per short ton higher at $300.60. March soy oil futures settled $0.27¢ lower at 33.03¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.74 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 181 points higher.

Al Kluis, Kluis Advisors, says the bulls in the market ignored the big U.S.-China trade deal signing event.

“Phase One was signed, but according to the traders, that big event was already priced in. China, moreover, said the tariffs would stay intact until Phase Two. That spooked investors a bit. After the significant run-up in futures the past six weeks, grains are pulling back a bit,” Kluis stated in a daily note to customers.

Kluis added, “After the announcement that the U.S.-China trade deal was signed, we saw that a lot of the trade action was already built into the prices. It will take a bullish USDA report to get the market to rally much.”

On Thursday, private exporters reported to the USDA export sales of 180,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2019/2020 marketing year.
 
The marketing year for soybean cake and meal began October 1.


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

Corn: 991,800 metric tons (mt) vs. the trade’s expectations of between 400,000 and 900,000 mt

Soybeans: 711,500 mt vs. the trade’s expectations of 400,000 and 700,000 mt

Wheat: 710,300 mt vs. the trade’s expectations of between 300,000 and 500,000 mt

Soybean meal: 375,300 mt vs. the trade’s expectations of 75,000 and 250,000 mt

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets show little life.

At the close, March corn futures finished 1½¢ lower at $3.87½; May corn futures closed 2¢ lower at $3.94.

March soybean futures settled at 13½¢ lower at $9.28¼; May soybean futures closed 13¾¢ lower at $9.42½.

March wheat futures ended 4¾¢ higher at $5.73¼.

March soy meal futures settled $1.90 per short ton higher at $300.10. March soy oil futures closed 0.77¢ lower at 33.30¢ per pound.

In the outside markets, the NYMEX crude oil market is 20¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 90 points higher.

On Wednesday, private exporters reported to the USDA export sales of 126,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says the markets are now quietly trading sideways in corn and soybeans.

“March corn continues to find any traction moving higher than $3.90 and March beans with the $9.40 zone. I believe that the signing of Phase One of the U.S.-China trade agreement was fully priced into the market, soybeans made a 60¢ run shortly after the original announcement was made. As the details of Phase One become more known, we may see more of a reaction from the market. New-crop beans are trading within 20¢ of their one-year highs. With SA preparing to bring forward what is expected to be a record crop, pressure on the U.S. soybean contract seems reasonable,” O’Connell says.  

O’Connell added, “Corn has rallied nearly 20¢ off its most recent lows and seems to have no reason to move outside of the range it has been comfortable with for some months now.” 

Al Kluis, Kluis Advisors, says the bulls in the market are looking for fresh news to trade.

“Grain prices have moved into a quiet trading range since the dull USDA report last week. The report did not give traders any reason to get excited. Now, everyone is waiting for the next headline that will have an impact on grains. Will the bulls be able to continue the rally on little or no fresh news,” Kluis stated in a daily note to customers.

Kluis added, “The South American crop is not likely to break records this year. However, it has the potential to be a big crop nonetheless. We will likely see hedge pressure from the South American farmer as a result of the trade deal.”

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Tuesday’s Grain Market Review

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

At the close, March corn futures finished ½¢ lower at $3.89½; May corn futures settled ¼¢ lower at $3.96.
 
March soybean futures closed unchanged at $9.42¼; May soybean futures ended unchanged at $9.55½.

March wheat futures closed 6¼¢ higher at $5.68.

March soymeal futures closed $1.80 per short ton lower at $302.20. March soy oil futures ended 0.12¢ higher at 34.07¢ per pound.

In the outside markets, the NYMEX crude oil market is 24¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 26 points higher.

On Tuesday, private exporters reported to the USDA export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
 
The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says investors will be watching this week’s U.S.-China trade agreement’s Phase One announcement.

“Nearby corn futures closed above last week’s high on Monday. The means the next resistance is now at the $4 benchmark, ” Kluis stated in a daily note to customers.

Kluis added, “How fast will Chinese buying develop after the Phase One trade agreement is signed on Wednesday? A lot of Chinese buying could spike grain prices higher.”

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Monday’s Grain Market Review

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

At the close, March corn futures finished 3¼¢ higher at $3.89; May corn futures settled 3½¢ higher at $3.96½.
 
March soybean futures closed 3¾¢ lower at $9.42¼; May soybean futures ended 3½¢ lower at $9.55½.

March wheat futures ended 2½¢ lower at $5.62¼.

March soy meal futures settled 30¢ per short ton higher at $303.80. March soy oil futures closed 0.40¢ lower at 33.95¢ per pound.

In the outside markets, the NYMEX crude oil market is 92¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 56 points higher.

On Monday, private exporters reported to the USDA the following activity:
 
Optional origin sales of 137,000 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.

Matt Tranel, cash advisor for Commodity Risk Management Group, says now that January’s WASDE & quarterly stocks reports are out and largely released neutral information for price direction, the market now turns its attention to January 15.

“The Phase One deal is scheduled to be signed on Wednesday. It appears that the market is hesitant to push soybean prices in a positive direction because whenever we have heard talk of progress on trade with China in the past, it has turned out poorly, and traders who were long the market were burned badly. Despite this hesitancy, we have never been within 48 hours of getting this deal done and the trade is cautiously hopeful, too,” Tranel says.  

Tranel added, “Corn is just trading the range at this point. The reports failed to provide a spark to the higher end, but was friendly enough to trade back up from our Friday lows. The range has essentially been $3.72 to $3.92 based upon the March board and 20¢ to 25¢ winter ranges have essentially defined the corn market the last few years,” Tranel says.

Al Kluis, Kluis Advisors, says investors will be watching South America’s crop progress and demand for U.S. products.

“Will we see action at the January-to-March soybean continuation gap? If March pulls back 9¢, then that is a logical area of support on the continuation chart. Also, watch for a close above $9.60 when the March contract becomes the nearby contract. In that case, we could see a major chart breakout to the top side,” Kluis stated in a daily note to customers.

Kluis added, “The positive close in the grain markets (after what we viewed as negative reports) is a positive signal for the grain markets. Now all attention is on crop and weather development in South America.”

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