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Wheat, Soybeans Close Session Higher on Friday

Investors prepare for long holiday weekend.

AUSTIN, Texas -- Wheat jumped on dry weather fears, and soybeans finished higher to close the week. 

Despite scattered rainfall in the southern Plains, much of the area is still in an extreme or exceptional drought, the worst possible ratings, according to the U.S. Drought Monitor. 

The Russian and Australian crops are also facing drought stress, according to government and private industry reports. 

July wheat jumped 14¼¢ to $5.44½ a bushel on the Chicago Board of Trade while Kansas City futures surged 15½¢ to $5.64½ a bushel. 

July corn futures added 2¼¢ higher to $4.06½ a bushel. December futures gained 3¢ to $4.25½ a bushel.

Soybeans closed higher on the day after China bought supplies from the U.S. 

July soybean futures finished 6¼¢ higher to $10.42 a bushel. November soybean futures closed 5¾¢ higher at $10.56 a bushel.

July soy meal futures rose $3.40 to $380.70 and July soy oil futures fell 0.4¢ to 31.31¢ a pound. 

In the outside markets, the NYMEX crude oil market is $2.44 a barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials were 98 points lower.

On Friday, the USDA announced fresh soybean sales.

Private exporters reported to the U.S. Department of Agriculture the following activity:

  • Optional origin sales of 165,000 metric tons of soybeans for delivery to China during the 2018/2019 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.
  • Export sales of 312,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

 

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Thursday’s Grain Market Review

On Thursday, the farm futures reversed lower, as the session closed.

At the close, the July corn futures are 4¼¢ lower at $4.04. December futures closed 4¢ lower at $4.22½.

July soybean futures finished 3½¢ lower at $10.35¾. November soybean futures ended 1¼¢ lower at $10.47.

July wheat futures finished ¾¢ lower at $5.30.

July soy meal futures finished $3.40 per short ton lower at $373.30. July soy oil futures finished 0.01 higher at 31.71¢ per pound. 

In the outside markets, the NYMEX crude oil market is $1.11 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 72 points lower.

On Thursday, the USDA announced its Weekly Export Sales showing strong corn business.

  • Corn = 1.12 million metric tons vs. the trade’s estimate of 700,000 to 1,300,000 metric tons
  • Soybeans = 146,300 mt. vs. the trade’s estimate of 200,000 to 500,000 mt.
  • Wheat =  452,300 mt. vs. the trade’s estimate of 100,000 to 400,000.

Separately, the USDA reported the following activity Thursday:

  • Export sales of 264,000 metric tons of soybeans for delivery to unknown destinations during the 2018/2019 marketing year.
  • Cancellations of export sales of 132,000 metric tons of grain sorghum for delivery to unknown destinations during the 2017/2018 marketing year.

The marketing year for soybeans and grain sorghum began September 1.

 

 

 

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Wednesday’s Grain Market Review

On Wednesday, the farm markets have support.

At the close, the July corn futures settled 3¾¢ higher at $4.08½. December futures finished 3¼¢ higher at $4.26½.

July soybean futures closed 8½¢ higher at $10.39½. November soybean futures ended 9¾¢ higher at $10.48¾.

July wheat futures finished 9½¢ higher at $5.31.

July soy meal futures closed $3.20 per short ton higher at $380.70. July soy oil futures settled 0.19¢ higher at 31.70¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.48 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 47 points lower.

Dustin Johnson, AgYield senior strategist, says the rally is being credited to China.

“We are just hearing optimism that China is back to buying U.S. cargoes again through August. While crush started out higher today, it is still slipping for December as the day goes on. A rally not led by the products may be another sign that it is about the expected soybean exports. November 2018 futures are gaining on March 2019 - November 2019 soybean futures, as well,” Johnson says.

On Wednesday, private exporters reported to the USDA the following activity:

  • Optional origin sales of 140,000 metric tons of corn for delivery to Saudi Arabia. Of the total, 70,000 metric tons is for delivery during the 2017/2018 marketing year and 70,000 metric tons is for delivery during the 2018/2019 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.

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Tuesday’s Grain Market Review

With U.S. and China normalizing their trade issues, the CME Group’s soybean market has moved up but is off its day’s high Tuesday.

At the close, July corn futures finished 2¢ higher at $4.04¾; December futures finished 2¼¢ higher at $4.23.

July soybean futures closed 5¼¢ higher at $10.30½; November soybean futures finished 5¼¢ higher at $10.39.

July wheat futures closed 14¼¢ higher at $5.21½.

July soy meal futures ended $1.60 per short ton lower at $377.50. July soy oil futures closed 0.09¢ higher at 31.51¢ per pound. 

In the outside markets, the NYMEX crude oil market is 24¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 53 points lower.

Jason Roose, U.S. Commodities analyst, says the relaxing of trade disagreements with China has a long tail, pushing up prices.

“Grains continue to add risk premium for the second day in a row, following the positive trade outcome over the weekend between U.S. and China. This could confirm continued strong exports. The final planting progress and weather the next 10 days will be key for price directions,” Roose says.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets get boost from U.S., China agreement to table their trade disagreements.

At midsession, July corn futures are 1½¢ higher at $4.04; December futures 1¼¢ higher at $4.21.

July soybean futures are 23¼¢ higher at $10.21; November soybean futures are 22¼¢ higher at $10.30.

July wheat futures are 8½¢ lower at $5.09.

July soy meal futures are $2.40 per short ton higher at $378.70. July soy oil futures are 0.24¢ higher at 31.22¢ per pound. 

In the outside markets, the NYMEX crude oil market is 69¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 302 points higher.

Jason Ward, managing director of Northstar Commodity, says the biggest rallying factor today is a euphoric response to the U.S.-China trade war aversion.

“There was so much liquidation in the soybean market and buyers waiting on the sidelines just in case of the tariff going into effect, this is now freeing people up to buy,” Ward says.
 
He adds, “I also think the big bust of a rain system over the weekend takes a little acreage pressure off soybeans as much more corn was able to get planted than expected. It’s why corn was muted in its response today and actually traded lower, but even now corn has come back.”
 
There is a lot of bullish ag fundamentals and more usage pledged by China that entices buyers, he says.

“Now let’s see some action, because, frankly, China has promised things in the past only to come up short on those promises, just so this isn’t another one of those times,” Ward says.
 
He adds, “For today though, I am one thankful trader that a trade war has been averted – so far.”

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