Soybeans add to weekly gains Friday

On Friday, the CME Groupโs farm markets lean on the soybean complex to move higher.
At the close, the March corn futures finished 2ยผยข higher at $4.96ยผ. May corn futures closed 2ยข higher at $4.97ยฝ.ย
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March soybean futures closed 19ยฝยข higher at $13.74ยพ. May soybean futures closed 17ยฝยข higher at $13.71ยฝ.
March wheat futures ended 3ยฝยข lower at $6.38ยพ.ย
March soymeal futures settled $7.40 short term higher at $439.60.
March soy oil futures closed 0.20ยข lower at 43.59ยข per pound.
In the outside markets, the NYMEX crude oil market is $1.18 per barrel higher (+2.32%) at $52.01. The U.S. dollar is higher, and the Dow Jones Industrials are 69 points lower (-0.33%) at 30,971 points.
On Friday, private exporters reported to the USDA export sales of 204,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.ย
The marketing year for soybeans began Sept. 1.
Bob Linneman, Kluis Advisors, says that investors were excited to see a daily export sales report with soybeanย sales announcements on Thursday morning.ย
โAlthough this is a good sign, the weekly export sales numbers were a marketing-year low. Soybean prices managed to end the day about 6ยข lower, which was 13ยข off the low on Thursday. Corn futures continue to find support during intraday setbacks. The buzz over Argentina (which is not exporting any more corn until new-crop harvest gets underway) does open the door for U.S. corn for a short time frame,โ Linneman stated in a daily note to customers.
Linneman added, โWill the USDA report next week provide enough fuel to keep feeding the grain bulls? At current prices, it would appear that traders are expecting to see some very friendly data. If they do not get what they want, then be prepared to test downside support on a quick move.โ
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Thursdayโs Grain Market Review
The bears controlledย Thursdayโs CME Groupโs farm markets.
At the close, the March corn futures settled 1ยข lower at $4.94. May corn futures finished ยฝยข lower at $4.95.ย
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March soybean futures closed 6ยผยข lower at $13.55ยฝ. May soybean futures finished 6ยฝยข lower at $13.53ยฝ.
March wheat futures closed 5ยผยข lower at $6.42ยผ.ย
March soymeal futures closed $6.10 short term lower at $432.20.
March soy oil futures closed 0.05ยข lower at 43.79ยข per pound.
In the outside markets, the NYMEX crude oil market is $0.28 per barrel higher (+0.55%) at $50.91. The U.S. dollar is higher, and the Dow Jones Industrials are 253 points higher (+0.82%) at 31,082 points.
On Thursday, private exporters reported to the USDA the following activity:
- Export sales of 213,350 metric tons of soybeans received during the reporting period for delivery to unknown destinations during the 2020/2021 marketing year.
- Export sales of 130,000 metric tons of soybeans for delivery to unknown destinations during the 2021/2022 marketing year. ย
The marketing year for soybeans began Sept. 1.
Separately, the USDAโs Weekly Export Sales Report Thursday shows weak demand figures for corn.
Corn = 748,900 metric tons vs. the tradeโs expectations of between 600,000 mmt.-1.20 mmt.ย
Soybeans = 116,800 mt. vs. tradeโs expectations of 400,000 mmt. to 800,000 mmt. China canceled 5 toย 6 cargoes.
Wheat = 275,300 mt.
Soybean meal = 124,800 mt.
Bob Linneman, Kluis Advisors, says that all eyes are on next weekโs USDA report.ย
โCorn was able to pop over the $5 mark on Wednesday. Although prices did not close over this milestone, it is quite impressive to see corn this high. Soybeans also hit new highs as the March contract reached $13.78. With the big USDA report slated for next Tuesday, we should not be surprised to see some profit-taking unfold in coming days. Keep a watch on the U.S. dollar as the daily chart posted a โdoji candleโ yesterday. ย A close over 90 could indicate the trend is ready to change,โ Linneman stated in a daily note to customers.
Linneman added, โAt current prices, grain traders are predicting a very bullish report next week. But will the USDA provide data to support current prices? If the bulls donโt get what they are looking for, then we could see an aggressive selloff for a few days.โ
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Wednesdayโs Grain Marketย Review
On Wednesday, the CME Groupโs farm markets closed off their highs.
At the close, the March corn futures finished 3ยผยข higher at $4.95. May corn futures closed 3ยผยข higher at $4.96.ย
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March soybean futures closed 14 1/2ยข higher at $13.61 1/2. May soybean futures closed 14ยข higher at $13.60.
March wheat futures settled 6 1/2ยข lower at $6.47 1/4.ย
March soymeal futures finished $6.50 short term higher at $438.30.
March soy oil futures settled 0.24 of a cent higher at 43.84ยข per pound.
In the outside markets, the NYMEX crude oil market is $0.10 per barrel higher (+0.20%) at $50.03. The U.S. dollar is lower, and the Dow Jones Industrials are 484 points higher (+1.59%) 30,876 points.
On Wednesday, private exporters reported to the USDA export sales of 102,616 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year. ย
The marketing year for corn began Sept. 1.
Peter J. Meyer, S&P Global Plattโs Head of Grain and Oilseed Analytics, says that the story remains on the production side, Argentina remains the focus..
โWhether itโs the weather or port workers/inspectors/farmer strikes, thereโs nothing but price support coming from Argentina. ย This uncertainty has led to little to no selling by those producers that are fortunate enough to still own some old crop corn and soybeans. ย Given the steep discount in new crop, thereโs very little interest in hedging there as well. ย The market is in wait and see mode with the Crop Production, Quarterly Stocks, and WASDE reports next week, while the Funds continue to add to record length in front of the reports. ย The path of least resistance remains higher until next week and the Funds are taking full advantage," Meyer says.
Bob Linneman, Kluis Advisors, says that this weekโs rally is grounded in global crop concerns.ย
โTrade concern about weather and yield potential in Argentina were the main driving forces. ย Corn had a 14ยข trading range and closed 8ยข higher, soybeans had a 60ยข trading range and closed 34ยข higher, while wheat futures closed 8ยข to 12ยข higher,โ Linneman stated in a daily note to customers.
Kluis added, โThe USDA Crop Production and supply/demand reports next week need to be very bullish to keep this rally going. The Relative Strength Index (RSI) is a momentum indicator that I watch. The RSI index shows an extremely overbought market on the daily, weekly, and monthly charts.โ
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Tuesdayโs Grain Market Review
On Tuesday, the CME Groupโs farm markets close off their daily highs, still sharply higher.
At the close, the March corn futures finished 8ยข higher at $4.91ยพ. May corn futures ended 8ยผยข higher at $4.92ยพ.ย
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March soybean futures closed 34ยข higher at $13.47ยฝ. May soybean futures closed 35ยข higher at $13.46ยฝ.
March wheat futures finished 12ยข higher at $6.54ยผ.ย
March soymeal futures closed $8.10 short term higher at $431.80.
March soy oil futures closed 1.47ยข higher at 43.60ยข per pound.
In the outside markets, the NYMEX crude oil market is $2.29 per barrel higher (+4.81%) at $49.91. The U.S. dollar is lower, and the Dow Jones Industrials are 259 points higher (+0.82%) 30,473 points.
Al Kluis, Kluis Advisors, says that the outside investors still have their prints on the market.ย
โThe latest CFTC report showed funds adding to their long positions in corn and soybeans, but the net position was less than expected. If the funds jump back into the market in a big way, then it can take prices higher, because farmers are not reluctant sellers,โ Kluis stated in a daily note to customers.
Kluis added, โThe most recent report from my source on South Americaโs crop shows projections moving lower. The size of the Argentine corn and soybean crops have dropped by 1 million metric tons, and the size of the Brazilian soybean crop has dropped by 2 MMT. ย For all of South America, the total corn crop is now 5 million metric tons (200 million bushels) less than last year and the total soybean crop is just 10 million bushels higher than last year and trending lower.โ
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Mondayโs Grain Market Review
On Monday, the CME Groupโs soybean markets closed off their daily highs, as South Americaโs crop continues to battle dry weather.
At the close, the March corn futures closed ยผยข lower at $4.83. May corn futures finished 1ยข higher at $4.84ยผ.ย
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March soybean futures settled 2ยข higher at $13.13, after reaching as high as $13.42. May soybean futures settled 4ยฝยข higher at $13.11ยผ, below its daily high of $13.39.
March wheat futures closed 1ยฝยข higher at $6.42ยผ.ย
March soymeal futures closed $5.70 short term lower at $423.70.
March soy oil futures settled 0.27ยข lower at 42.13ยข per pound.
In the outside markets, the NYMEX crude oil market is $1.03 per barrel lower (-2.14%) at $47.49. The U.S. dollar is lower, and the Dow Jones Industrials are 552 points lower (-1.81%) 30,054 points.
Britt OโConnell, ever.ag, says that volatile is the best way to describe the grain markets, as of late. ย
โThe overnight trade saw both corn and soybeans post significant gains thatย started to fade as we entered into the midday trade. Soybeans continue to be the leader while corn and wheat have been benefactors of the move. Fears of tightening U.S. stocks paired with concerns over South Americaโs crop fanned the flames in the bean market. On January 12, the USDA will take its monthly evaluation of the U.S. supply and demand balance sheet. The January report has historically proven to be volatile and, as it stands today, seems reasonable to assume for this year,โ OโConnell says. ย
Should the USDA trim either production or raise demand, both exports and crush have been strong for soybeans, ending stocks are at risk of falling below 100 million bushels, she says. ย
โIf the ending stocks are estimated below 100 million bushels, it would be a level not seen since the recovery of the 2012 drought and massive corn acres planted in 2013. That year soybean stocks ended the year at a mere 92 million. Some analysts believe the number could be as small as 75 million bushels,โ OโConnell says. ย
Meanwhile, corn hasnโt carried much of a story, but as the report approaches, analysts are expecting the USDA to lower ending stocks, likely a combination of production reduction and possibly raising the export estimates, she says. ย
โStrong Chinese corn demand will remain the greatest reason to be optimistic for higher corn prices,โ OโConnell says.
Al Kluis, Kluis Advisors, says that the grain markets are off to a great start.
โFor the first time ever, I see a gap on my weekly, monthly, and even yearly continuation charts for corn and soybeans. The bull spreads firming in corn and soybean futures showย continued strong demand. I see no evidence yet of price rationing. The gap higher sets up our next price targets,โ Kluis stated in a daily note to customers.
Kluis added, โI am watching weather and crop conditions in Argentina where I see no major rain events in the forecast. Now their yield potential will continue to drop. Corn production in the five main grain-producing countries is already below last year. It is just a matter of weeks until the soybean production falls as well.โ
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