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Corn, Soybean Markets Reverse Trade Direction Thursday

Soybeans close higher.

DES MOINES, Iowa -- On Thursday, the CME Group farm markets close mostly lower.

At the close, the Sep. corn futures finished 3¢ lower at $3.59 3/4. Dec. corn futures settled 1/4¢ higher at $3.71 3/4.
 
Sep. soybean futures closed 3 1/2¢ higher at $8.56 1/4. Nov. soybean futures ended 2 3/4¢ higher at $8.68 1/2.

Dec. wheat futures settled 2 1/2¢ lower at $4.72 3/4.

December soymeal futures closed $1.70 per short ton lower at $298.00. December soy oil futures closed $0.13 higher at 28.58¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.81 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 312 points higher.

Al Kluis, Kluis Advisors, says trade news helped corn move off its low.

“We had a nice pop in corn and soybeans, yesterday, as President Trump said he was going to make some changes to the biofuels program, which should benefit farmers. We don't have details yet, but it helped the corn market rally off the lows and eventually brought along the soybeans. First Notice Day for September futures will be Friday, August 30. That is causing the funds to roll out of their short September corn contracts and into December contracts, making the spreads look good this week,” Kluis told customers in a daily note.

Kluis added, “This rally in corn market is more of a short-covering rally. The upside will be limited. If December corn futures get back up to $3.80, then we will probably see some selling take place.”

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

  • Corn= 856,400 metric tons vs. the trade’s expectations of between 550,000-1,050,000 mmt.
  • Soybeans= 448,300 mt. vs. the trade’s expectations of between 300,000-900,000 mt.
  • Wheat= 661,700 mt. the trade’s expectations of between 400,000-625,000 mt.
  • Soybean meal= 298,000 mt. the trade’s expectations of between 175,000-400,000 mt.

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Wednesday’s Grain Market Review

On Wednesday, CME Group’s farm markets attracted investors as the session closed.

At the close, September corn futures finished 5¾¢ higher at $3.62¾; December corn futures closed 4¾¢ higher at $3.71.
 
September soybean futures settled 6½¢ higher at $8.52¾; January soybean futures closed 6½¢ higher at $8.65¾.

December wheat futures ended 1½¢ lower at $4.75¼.

December soy meal futures settled $2.70 per short ton higher at $299.70. December soy oil futures closed 0.10¢ higher at 28.45¢ per pound.

In the outside markets, the NYMEX crude oil market is 63¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 221 points higher.

Al Kluis, Kluis Advisors, says investors are trying to pinpoint the soybean support from Monday.

“There are an estimated 8.7 million acres of soybeans that are setting pods behind the five-year average. Considering we are just a handful of days away from September, you would think the bulls would be able to rally more than one day. Until we see a close over the prior two-day high, the bears remain in control,” Kluis told customers in a daily note.

Kluis added, “Three of the five lowest-rated states for soybean conditions are Indiana, Illinois, and Ohio. Another noteworthy tidbit from the Monday afternoon Crop Progress Report is that we have eight states that are 20% or more behind the five-year average for corn dented. Given the data so far, the bears may be asking a lot of Mother Nature to finish out the crop.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets trade mostly weaker.

At the close, September corn futures closed 1½¢ lower at $3.57; December corn futures settled 2¢ lower at $3.66¼.
 
September soybean futures settled 7½¢ lower at $8.46¾; January soybean futures closed 8¢ lower at $8.59¾.

December wheat futures closed 1¾¢ higher at $4.76¾.

December soy meal futures settled $1.60 per short ton lower at $297.00. December soy oil futures ended 0.34¢ lower at 28.35¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.34 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 94 points lower.

Matt Tranel, cash adviser for Commodity Risk Management Group, says move along, nothing to see in today’s market.  

“Nothing has really changed in the corn market today.  We are currently watching a 3¢ trade between the low and high trade. Soybeans have a little bit more action as Chinese officials denied U.S. claims that further discussions to be held in the near future. Soybeans are down 9¢, and that has corn currently down a penny,” Tranel says.

Al Kluis, Kluis Advisors, says investors are trying to pinpoint the soybean support from Monday.

“Did the positive move come from the trade agreement between the U.S. and Japan? This trade deal was expected, so it is unlikely that the enthusiasm in soybeans was entirely related. The most likely reason for the positive move were the Sunday evening comments that China and the U.S. are ready to negotiate again. However, if traders really thought the two countries were serious, it is likely we would have seen much more than a dime rally. Still, after the back-and-forth last week, it is encouraging that the two countries are willing to open discussions again,” Kluis told customers in a daily note.

Kluis added, “The Monday afternoon Crop Progress Reports have not been swaying traders one way or the other over the last month. Once the calendar rolled to August, the traders likely moved into show-me-the-damage mode. They will wait to see what the crop looks like when the combines roll.” 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets close mostly lower, with the exception of a strong soybean market.

At the close, September corn futures finished 1¼¢ lower at $3.58¾; December corn futures ended ½¢ higher at $3.68¼.
 
September soybean futures settled 10½¢ higher at $8.53¾; January soybean futures closed 10½¢ higher at $8.67.

December wheat futures closed 2½¢ lower at $4.75.

December soy meal futures settled $3.20 per short ton higher at $298.60. December soy oil futures finished 0.01¢ lower at 28.69¢ per pound.

In the outside markets, the NYMEX crude oil market is 41¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 183 points higher.

Dustin Johnson, AgYield senior strategist, says today’s higher soybean market reflects an oversold market.

“Soybeans were down sharply on Friday from trade war escalation; we think that may have been overdone as the chances of China coming back to the table anytime soon should have been highly discounted prior to Friday,” Johnson says.

Johnson adds, “On another note, the crop tour showed fairly massive pod count reductions, which could translate to a much larger yield loss than the August WASDE suggested. The market may be trading the cool weather and chances for yields to fall dramatically.”

Al Kluis, Kluis Advisors, says investors are watching weather and outside money.

“After the U.S. and China traded some jabs in the ongoing trade war late last week, we got some positive news. The U.S. and Japan have come to an agreement on a new trade policy. Much of this was expected, but it will still be viewed as friendly going forward,” Kluis told customers in a daily note.

Kluis added, “Keep a close eye on the weather forecast. September will start out cool and dry, but will we get cool enough to talk about a frost threat? Any potential frost would definitely be positive to the grain markets.”

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