Soybeans and corn close higher to end the week
Soybean and corn futures closed higher Friday amid signs of demand while wheat fininshed lower on lack of purchases.
Exporters sold 318,000 metric tons of sobyeans to China and 175,000 metric tons of soymeal to the Philippines, the U.S. Department of Agriculture said in a report today.
Earlier this week, the USDA reported sales of 596,000 metric tons of corn to China and 132,000 tons of soybeans to an unknown destination.
Analysts have been expecting the government to report sales of wheat to overseas buyers, but nothing has appeared in reports so far this week.
Exporters are required to report export sales of more than 100,000 tons to an outside buyer or quantities totaling 200,000 tons or more on any given day. It’s possible sales under those amounts have been made but not yet reported.
November soybean futures closed up 3¢ to $9.69 a bushel. Soymeal futures for December jumped $4.80 to $317.60 a short ton, and soy oil dropped 0.47¢ lower at 32.82¢ per pound.
Corn for December rose 3½¢ to $3.57¼ a bushel.
December Chicago wheat futures dropped 1¾¢ to $5.51½ a bushel Friday morning, while Kansas City wheat lost 1¾¢ to $4.74 a bushel.
Thursday’s Grain Market Review
On Thursday, the CME Group’s farm markets closed mostly lower.
At the close, the Dec. corn futures finished 5¢ lower at $3.53 1/4. March corn futures closed 4 1/2¢ lower at $3.64 1/4.
Nov. soybean futures settled 4¢ higher at $9.66. January soybean futures closed 4¢ higher at $9.72 1/4.
Dec. wheat futures closed 5¢ lower at $5.53 1/4.
Dec. soymeal futures finished $2.60 per short ton higher at $312.80. Dec. soy oil futures closed $0.24 cent lower at 33.29¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.18 per barrel lower at $41.33. The U.S. dollar is higher, and the Dow Jones Industrials are 913 points lower.
On Thursday, private exporters reported to the USDA the following activity:
- Export sales of 318,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
- Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
The marketing year for soybeans began Sept. 1.
Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures.
Corn = 2.48 million metric tons vs. the trade’s expectations of between 2.5 mmt and 2.6 mmt.
Soybeans = 1.85 million metric tons. vs. trade’s expectations of 1.0 mmt to 1.8 mmt.
Wheat = 585,400 mt.
Soybean meal = 342,500 mt.
Al Kluis, Kluis Advisors, says that farmers should be rewarding the market.
“For the farmer, the recent rally has been a welcome sight. However, the charts are posting many signals that would suggest a top is near. Take advantage of the counter-seasonal rally and protect these prices,” Kluis told customers in a daily note.
He added, “If soybeans can break through overhead chart resistance soon and with strong momentum, then we could see another round of buyers jump in. However, if we push to new highs and fail to follow through, then we could see a quick and aggressive pullback.”
Wednesday’s Grain Market Review
On Wednesday, the CME Group’s farm markets weaken.
At the close, the Dec. corn futures finished ¾¢ higher at $3.58. March corn futures closed 1½¢ higher at $3.69¼.
Nov. soybean futures settled 7¼¢ higher at $9.62. January soybean futures ended 7¼¢ higher at $9.68½.
Dec. wheat futures ended 5¾¢ lower at $5.58¼.
Dec. soymeal futures closed $0.60 per short ton lower at $310.20. Dec. soy oil futures finished $0.65¢ higher at 33.53¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.33 per barrel lower at $41.43. The U.S. dollar is higher, and the Dow Jones Industrials are 286 points higher.
Jason Roose, U.S. Commodities, says that active buying continues in the grains today.
“This follows a mixed overnight trade, as spot exports continue for corn and beans with a weaker dollar making U.S. grains attractive. Unknown yield reports will counter any early harvest pressure. The weather will still be watched close for the next market move,” Roose says.
Al Kluis, Kluis Advisors, says that the market bulls have their work cut out for them, if they are going to keep control of the markets.
“Momentum indicators across the grain complex are deeply overbought. Will the funds continue to be buyers of grains with harvest just around the corner? Take advantage of the unseasonal rally and protect prices when you can, not when you have to,” Kluis told customers in a daily note.
He added, “The rally in grains is taking for granted some declines to production. The question now: How much decline? It may be difficult for the bulls to keep the momentum going until the next USDA report (Friday, September 11).”
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s wheat market finds big interest, as soybean prices close slightly higher.
At the close, the Dec. corn futures finished ¼¢ higher at $3.58. March corn futures settled ¼¢ higher at $3.67½.
Nov. soybean futures closed 1¼¢ higher at $9.54½. January soybean futures ended 1¼¢ higher at $9.61.
Dec. wheat futures ended 11¾¢ higher at $5.64.
Dec. soymeal futures closed $1.70 per short ton lower at $310.80. Dec. soy oil futures finished 0.02¢ higher at 32.88¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.15 per barrel higher at $42.76. The U.S. dollar is higher, and the Dow Jones Industrials are 146 points higher.
On Tuesday, private exporters reported to the USDA the following activity:
- Export sales of 596,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
- Export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
The marketing year for corn and soybeans began Sept. 1.
Al Kluis, Kluis Advisors, says that investors will look at rain chances for Iowa’s crops.
“Watch the extended weather forecasts and the U.S. Drought Monitor on Thursday. Some of Iowa received 0.5 to 1 inch of rain on Monday, but the majority is still very short of moisture. This will show up on Thursday,” Kluis told customers in a daily note.
He added, “The USDA weekly crop report on Monday showed corn conditions down by 2% and soybean ratings down by 3%. This is about what the trade had expected. Iowa corn ratings down by 5%, along with the 3% decline nationwide in corn and another 5% down in Iowa. This will keep U.S. crop projections moving lower.”
Monday’s Grain Market Review
On Monday, the CME Group’s farm markets see the buyers back off from early interest.
At the close, the Dec. corn futures ended 1½¢ lower at $3.57¾. March corn futures settled 1¾¢ lower at $3.67½.
Nov. soybean futures settled 3¢ higher at $9.53½. January soybean futures settled 3½¢ higher at $9.59¾.
Dec. wheat futures finished 3¢ higher at $5.52¾.
Dec. soymeal futures closed $2.80 per short ton higher at $312.50. Dec. soy oil futures closed 0.38¢ lower at 32.86¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.16 per barrel lower at $42.81. The U.S. dollar is lower, and the Dow Jones Industrials are 218 points lower.
On Monday, private exporters reported to the USDA export sales of 596,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
The marketing year for corn began Sept. 1.
Greg Lumsden, Cargill MarketGuide, says that strength in the ag markets over the last week has been a combination of fund repositioning, growing demand, and general lowering of yield estimates by analysts.
“The rally is particularly impressive as this is a seasonally weak time frame and is usually coupled with forced farmer selling at the end of August. In spite of these trends, the funds have begun to aggressively cover their short positions and effectively exchange positions with farmers who have been selling,” Lumsden says.
The main catalyst for this rally is perceived lower production than we were looking at a few weeks ago, he says.
“Most analysts heavily weigh condition score models, and they have dropped sharply over the last few weeks. Throw in storm damage in Iowa and a dry forecast to finish the crop, and most yield estimates have gone from 178 to 182+ to 175 to 178 with a downward bias. The market is also taking notice of very strong Chinese demand, which will also eat into our ending stocks numbers,” Lumsden says.
Lumsden added, “All in all, we certainly aren’t in a tight situation, but the ending stocks picture just got more interesting and will bring in more risk premium for South America’s growing season and our planting in the spring. Renewed volatility in ag markets and general belief that basis will be firm this winter/spring should bring more opportunities than our farmers have seen in a while. For farmers, the key will be to maintain discipline and take advantage of rallies and not get blinded by new friendly market inputs.”
Al Kluis, Kluis Advisors, says that the timing of this rally is unusual.
“For the first time in five years, prices rallied into the end of the month of August. For the month, nearby corn futures are up 36¢, nearby soybean futures are up 68¢, and wheat CBOT futures are up 12¢,” Kluis told customers in a daily note.
He added, “The USDA Crop Progress report today will show corn and soybean conditions 2% to 4% lower than last week. Iowa crop conditions will again take a big hit in the Monday Crop Progress report. Watch the soil moisture reports for Iowa. In last week’s report, 96% of Iowa was abnormally dry. The Iowa crop really needs to get some rain this week. If the corn crops in Iowa and other areas of the western Corn Belt start to shut down early, then it will result in 20% to 40% yield loss in those fields.”