Ag markets close lower Friday

Investors wait to see if China will start buying U.S. corn.

DES MOINES, Iowa -- On Friday, the CME Group's farm markets extend losses from yesterday.

Today, the soybean market reached a six-week low, corn is lower, following reaching a three-month high earlier this week, and wheat is off its 1½-year high from earlier this week.

At the close, the March corn futures finished 6 1/2¢ lower at $3.87. May corn futures finished 5 1/4¢ lower at $3.92 3/4.

March soybean futures closed at 7 1/4¢ lower at $9.02 1/4. May soybean futures closed 7 1/2¢ lower at $9.15 1/2.

May soymeal futures settled $0.60 per short ton lower at $298.30. May soy oil futures closed $0.46 cents lower at 32.02¢ per pound.

March wheat futures finished 7¢ lower at $5.73 3/4.

In the outside markets, the NYMEX crude oil market is $1.44 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 168 points lower.

Jason Roose, U.S. Commodities, says that investors await any real reason to build premium into these markets.

“The grains are on defense today, after a range trade week in corn. Weather continues to be nonthreatening in South America, with harvest in its early stages. China still seems to be absent, after the Phase One trade signing, from any large purchases of grain which is limiting any price premium to be added to the market,” Roose says.

Al Kluis, Kluis Advisors, says that the corn market could have a story soon.  
 

“Corn continues to find support as rumors are floating around that we could see some increased export business from China causing the funds to buy back some of their short position. Soybeans fall under some resistance as we find out more about this coronavirus. All in all the corn and bean markets feel a bit heavy in here and with crude oil coming under pressure and uncertainty about the coronavirus, we could see the grains take some risk off,” Kluis told customers in daily note.

Kluis added, “I think yesterday’s buildup in ethanol stocks for the second week in a row along with poor ethanol margins will cause some ethanol plants to start to idle back and that could cause corn basis levels to soften.”

On Friday, the USDA released a strong Weekly Export Sales Report.

  • Corn = 1.0 million metric tons vs. the trade’s expectations of between 500,000 and 1.2 million metric tons
  • Soybeans = 910,700 mt. vs. the trade’s expectations of between 600,000 and 1.1mmt
  • Wheat = 696,000 mt. vs. the trade’s expectations of between 200,000 and 800,000 metric tons
  • Soybean meal = 641,900 mt. vs. the trade’s expectations of between 200,000 and 450,000 metric tons                  

Separately, private exporters reported to the USDA export sales of 142,428 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for corn began Sept. 1.    

---------------

Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets end mostly higher.

At the close, the March corn futures closed 5¢ higher at $3.93¾. May corn futures finished 4¼¢ higher at $3.98½.
 

March soybean futures closed 4½¢ lower at $9.09½. May soybean futures ended 4¾¢ lower at $9.23½.

March wheat futures finished 2¾¢ lower at $5.80¼.

March soymeal futures settled $1.00 per short ton higher at $298.90. March soy oil futures closed $0.54 cents lower at 32.48¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.01 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 26 points lower.

Al Kluis, Kluis Advisors, says to expect grains to fail to hold support and drift lower.  

“South American crops will be benefitting from some much-needed moisture, and their crops look to be bigger than last year’s crop. Wheat posted a new high yesterday. Russian wheat offers are rising and supporting demand from the U.S. For the near term, we are just running out of friendly info to trade, ” Kluis stated in a daily note to customers.

Kluis added, “The coronavirus outbreak in China has the market spooked. That is causing investors in both commodities and stocks to head to the sidelines.”

Private exporters reported to the USDA the following activity:

  • Export sales of 143,948 metric tons of corn for delivery to Guatemala. Of the total, 114,224 metric tons is for delivery during the 2019/2020 marketing year, and 29,724 metric tons is for delivery during the 2020/2021 marketing year. 
  • Export sales of 141,000 metric tons of corn for delivery to unknown destinations during the 2019/2020 marketing year.

The marketing year for corn began September 1.

---------------

Wednesday’s Grain Market Review

On Wednesday, the CME Grain markets lose strength as the session went along.

At the close, March corn futures finished 1¼¢ higher at $3.88; May corn futures ended ¾¢ lower at $3.94.
 
March soybean futures closed 2½¢ lower at $9.13½; May soybean futures ended 2¼¢ lower at $9.27½.

March wheat futures finished 3¾¢ lower at $5.77.

March soy meal futures closed $1.20 per short ton lower at $297.90. March soy oil futures finished 0.24¢ higher at 33.99¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.66 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 46 points higher.

Jack Scoville, PRICE Futures Group, says this trading session, so far, has been an uneventful day for everything except wheat.  

“Wheat prices went up and then found new selling on some profit taking and new selling against the $6-per-bushel March futures level, only to push lower now. On corn, the question I am hearing from everyone is when is it going above $3.92? The market seems to get close and then dies for whatever reason,” Scoville says.  

The soybean market is reacting, in part, to the China news highlighting the flu epidemic over there, he says.  

“It’s pretty bad stuff, but why soybeans should care is beyond me. They will not lose too many people out of it and demand is still coming to this market. Plus, U.S. soybean exports are ahead of the scheduled pace until this point, anyway.”

Al Kluis, Kluis Advisors, says investors want to see sales as a result of these trade agreement announcements.  

“We have seen wheat climb and climb, while corn tries to follow. Will we see corn slide further when wheat finally sees a pull-back? A lack of news should give the bears an edge over the short term,” Kluis stated in a daily note to customers.

Kluis added, “The forecast is for dry areas of Brazil and Argentina to get some much-needed moisture. Traders are still expecting to see a large crop from South America once harvest gets under way.”

------------

Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets have not found any buyers.

At the close, March corn futures finished 1¾¢ lower at $3.87¼; May corn futures closed 1¾¢ lower at $3.93.
 
March soybean futures finished 13¾¢ lower at $9.16½; May soybean futures ended 13¢ lower at $9.29¾.

March wheat futures closed 11¢ higher at $5.81½. It’s interesting to note that Chicago’s wheat market five-year high is $6.16¾.

March soy meal futures closed $1.50 per short ton lower at $299.10. March soy oil futures finished 0.60¢ lower at 32.75¢ per pound.

In the outside markets, the NYMEX crude oil market is 26¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 191 points lower.

Al Kluis, Kluis Advisors, says investors want to see sales as a result of these trade agreement announcements.  

“Will we see any export sales come across the daily reporting system today? The strong price action on Friday was tied to reports that large corn sales were made. If traders are disappointed, then the bulls will have a difficult time holding support,” Kluis stated in a daily note to customers.

Kluis added, “The news burden is with the bulls over the short term. The bulls need to see friendly news headlines nearly every day or run the risk of the bears gaining traction.”

Read more about

Tip of the Day

Sawdust-collection drawer keeps the shop clean

table-saw dust collector Is sawdust a problem in your garage or shop? Give it an easy-to-clean place to fall and keep your work area sawdust-free.

Talk in Marketing