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Soybeans Trade Higher for Sixth Straight Session Friday

Corn and wheat markets are mixed.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets closed mostly higher, with the help of a strong soybean complex.

At the close, the March corn futures finished 1¢ higher at $3.52½. May futures ended 1¼¢ higher at $3.60 3/4.

March soybean futures closed 4¼¢ higher at $9.77¼. May soybean futures settled 4¼¢ higher at $9.88½.

March wheat futures finished 2½¢ lower at $4.22¾.

March soy meal futures finished $3.20 per short ton higher at $331.60. January soy oil futures settled 0.05¢ higher at 32.28¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.50 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 11 points lower.

Brian A. Rydlund, CHS Hedging market analyst, says that soybean strength continues to stem more from soymeal futures advancing than from South American weather.

“The price increases in soybeans have both old- and new-crop beans moving today. It’s been awhile since we’ve seen that happen,” Rydlund says.          

Corn has moved a bit more since last Friday, as futures pushed through $3.52 to $3.53 per bushel, basis March futures, Rydlund says.

“Each nickel higher buys more from farmers, I think,” Rydlund says.  

He adds, “The average U.S. farmer has more corn unsold today than is typical. Also, a lot of farmers have done little on marketing new crop. New-crop soybean prices, today, provide a profitable chance for growers. And growers may be getting leaned on to make ‘profitable’ sales.”      

The market continues to eye SA’s weather. Outside markets remain favorable, with the U.S. dollar on a down trend, helping U.S. commodities, Rydlund says.

Cory Bratland, Kluis Commodities’ chief grain strategist, says that fundamental news out of Argentina may be partially propping up the bean market.

“Rumors are out that the Argentina soybean crop is smaller than analysts expect. There are still some soybean acres not planted, and some speculation they will not get planted,” Bratland stated in a daily note to customers.

On Friday, the USDA released its delayed Weekly Export Sales Report. Because of the Martin Luther King Jr. holiday on Monday, the governmental report was moved from Thursday to today.

The report shows that corn and soybean sales beat the trade’s expectations.

  • Corn = 1.88 million metric tons vs. the trade expectations of between 450,000 and 800,000 mt.
  • Soybeans = 1.527 million mt. vs. the trade expectations of between 800,000 and 1,350,000 mt.
  • Soybean meal = 261,800 mt. vs. the trade expectations of between 150,000 and 350,000 mt.             
  • Wheat = 190,600 mt. vs. the trade expectations of between 250,000 and 600,000 mt.

 

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Thursday’s Grain Market Review

On Thursday, the CME Group’s soybean and wheat markets have found some interest from investors.

At the close, the March corn futures finished 1½¢ lower at $3.51½. May futures finished 1½¢ lower at $3.61.

March soybean futures ended 4¼¢ higher at $9.73. May soybean futures ended 4¼¢ higher at $9.84¼.

March wheat futures finished 3¾¢ higher at $4.25¼.

March soy meal futures closed $4.10 per short ton higher at $328.40. January soy oil futures closed 0.28¢ lower at 32.23¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.04 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 59 points lower.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says that buying is sort of weather related. 

“Wheat getting support from the dry conditions in the Great Plains and somewhat firmer prices Egypt paid yesterday for its latest purchases.” 

Corn appears to be pure short covering, he says. 

“Some are saying acreage could be less next year and maybe so, but specs are short and the market stopped going down on the acreage talk,” Scoville says. 

“The soybean market seems to be up more along with forecasts for dry weather to return in the longer term in Argentina. Maybe for a month or so it could be drier. Our prices are relatively cheap in world markets, although not cheap enough to shut Brazil sales out entirely,” Scoville says.

 

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets settled higher.

At the close, the March corn futures finished 4¾¢ higher at $3.53; May futures closed 4¼4¢ higher at $3.61.

March soybean futures ended ¾¢ higher at $9.68¾; May soybean futures ended ½¢ higher at $9.80.

March wheat futures closed 5¢ higher at $4.21½.

March soy meal futures settled $1.50 per short ton higher at $324.30. January soy oil futures ended 0.28¢ lower at 32.51¢ per pound. 

In the outside markets, the NYMEX crude oil market is 18¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 303 points higher.

Alan Brugler, president of Brugler Marketing & Management LLC, says though wheat is grinding lower to retest lows, winterkill and dryness are still a story.

“There is a lot of generic wheat in the world, but hi-pro is still in short supply, and HRW can sometimes be hi-pro,” Brugler says.

Brugler adds, “Corn stocks in U.S. and China are still the tightest in several years, so corn exports should pick up. Would happen faster if the dollar continues to drop and/or smaller SAM crops.”

Regarding the stock market, it climbs a wall of worry, Brugler says.

“As long as everyone still thinks it is too high, it can go up. The number of short sellers is dwindling, however. I think the main story is anticipating much stronger earnings due to the tax cut, lowering the forward price-to earnings,” Brugler says.

On Wednesday, private exporters reported to the USDA export sales of 130,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s soybean futures market ended at one-week highs.

Don’t look now, but the bullish USDA Report dropping U.S. 2017 production may be giving the soybean market some legs.

At the close, the March corn futures finished 2¢ higher at $3.48¼; May corn futures finished 2¢ higher at $3.56¾.

March soybean futures closed 7½¢ higher at $9.68; May soybean futures ended 7½¢ higher at $9.79½.

March wheat futures closed 4¢ lower at $4.16½.

March soy meal futures ended $5.80 per short ton higher at $322.80.

January soy oil futures finished 0.34¢ lower at 32.79¢ per pound. 

In the outside markets, the NYMEX crude oil market is 42¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 89 points lower.

The National Oilseed Processors Association reported a record-large December soy crush of 166.382 million bushels, larger than the trade had expected.

Cory Bratland, Kluis Commodities chief grain strategist, says soybeans seem to be wanting to move higher, given the fact that USDA lowered yield and, ultimately, the production.

“So, it does open the door for a potential soybean story. Demand is still very strong, but we did see the USDA cut the U.S. export projections for this year and totally agree with them doing that,” Bratland says.

He adds, “We are still well behind last year’s export pace and falling further behind. So net/net, the market is focused now on South American weather. Given that there were not major surprises in the report last week and today, I would say the market has a huge crop priced in for all of South America.”

South America is reaching its critical growing time of the year for soybeans. So, that may offer up some market pops, he says.

The corn market is not bullish by any means, but it seems to be getting dragged down by the wheat more so, Bratland says.

“I think it is a function that the market already had very negative corn number priced into the marketplace, but the dang wheat was really negative and really holding corn down,” he says. “Not that corn was gonna rally a bunch, but we could head back and test the resistance at $3.54 to $3.55 on March corn.”

Concern going forward is export sales and inspections, as both are lagging so far that in future reports USDA could cut the corn export projections, he says. “We feel they should cut it by 25 to 50 million bushels worth,” Bratland says.
 
The fact that the U.S. dollar dropped below support at 91.01 last week will help commodities in the long run, he says.

“Also crude oil above $60 and pushing $65 per barrel is also positive. Funds continue to hold huge short positions in all three grains and that isn’t bearish, but we need to give them something to trade on. Otherwise, they will sit and hold them short positions,” Bratland says.

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