Friday's ag markets close stronger

The Dow Jones Industrials attempts to top 30,000.

On Friday, the CME Group's wheat market has the attention of investors.

At the close, the Dec. corn futures finished 5 1/4¢ higher at $4.25 1/4. March corn futures closed 6 1/4¢ higher at $4.33 1/4. 

January soybean futures finished 7 3/4¢ higher at $11.91 1/2. March soybean futures closed 7¢ higher at $11.92 1/2.

March wheat futures ended 9 1/2¢ higher at $6.06. 

Jan. soymeal futures closed $0.40 per short ton higher at $396.30.

Jan. soy oil futures closed 0.57 of a cent higher at 38.43¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.18 per barrel lower (-0.39%) at $45.53. The U.S. dollar is lower, and the Dow Jones Industrials are 37 points higher (+0.13%) 29,910 points.

On Friday, private exporters reported to the USDA export sales of 302,160 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Separately, the USDA’s Weekly Export Sales Report Friday shows strong demand figures for corn.

  • Corn= 1.66 million metric tons vs. the trade’s expectations of between 800,000 mmt.-1.40 mmt. Mexico was the biggest buyer at 550,000mt.
  • Soybeans= 768,100 metric tons. vs. trade’s expectations of 700,000 mmt.-1.4 mmt. Of that total, China bought 578,700 mt.
  • Wheat= 795,700 mt. vs. the trade's expectation of 200,000-400,000 mt.
  • Soybean meal= 138,100 mt.vs. the trade's expectation of 100,000-300,000 mt.

Jim Bower, Bower Trading, says that next week investors will be watching macroeconomic factors.

"U.S. market attention, next week, will focus on whether the pandemic surge continues and any vaccine news, any progress in Washington on a spending or stimulus bill, and political uncertainty as the markets wait for finalized presidential election results. Also, (investors will eye) any additional appointments by President-Elect Biden for his economic team,  oil prices as OPEC+ meets on Mon-Tue. to decide on its production level for Q1-2021," Bower stated in a daily note to customers.
 
Bower added, "Also, the markets are waiting to see if the tighter restrictions implemented in the past several weeks will dampen the pandemic surge.  Additional restrictions are likely if the pandemic surge worsens since hospitals across the U.S. are already at or near capacity."

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Wednesday's Grain Market Review

On Wednesday, the CME Group’s farm markets close lower.

At the close, the Dec. corn futures closed 5¾¢ lower at $4.20. March corn futures settled 5¢ lower at $4.27. 

January soybean futures closed 7¼¢ lower at $11.84. March soybean futures ended 7½¢ lower at $11.85½.

March wheat futures finished 21¢ lower at $5.96½. 

Jan. soymeal futures closed $1.00 per short ton lower at $395.90.

Jan. soy oil futures closed 0.14¢ higher at 37.86¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.97 per barrel higher (+2.16%) at $45.88. The U.S. dollar is lower, and the Dow Jones Industrials are 172 points lower (-0.57%) at 29,874 points.

Jack Scoville, PRICE Futures Group, says that the lower markets were a result of speculative traders selling their positions.
 
“We are at Thanksgiving with a day off tomorrow and a short day on Friday. Plus, the weekend and end of month follow. So, the funds and other specs are reducing the long positions. Weather is improved in southern Brazil and Argentina as well. Still, the weather is dry farther to the north in Brazil. No export demand on the daily system is not helping, either,” Scoville says.

Bob Linneman, Kluis Advisors, says that every dip seen in the markets has been bought.

“Chinese import data suggest they have already imported 7.82 million metric tons of corn this year. This is the number that traders are anxiously watching. How will the next few months pan out for export sales of corn? Soybean bulls are still waiting for something to pop up on the daily export sales reports. Although we have not seen much in the daily reports all month, the weekly sales reports have been impressive,” Linneman told customers in a daily note.    

He added, “If the funds feel China is stepping away from further U.S. soybean purchases, then it will likely lead to at least some liquidation of longs. Keep watching the July vs. November soybean spread for confirmation of major concerns.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets close mostly lower.

At the close, the Dec. corn futures finished ¾¢ lower at $4.25¾. March corn futures closed ¾¢ lower at $4.32½. 

January soybean futures settled ¼¢ lower at $11.91½. March soybean futures ended ¾¢ higher at $11.93½.

March wheat futures closed 13½¢ higher at $6.17½. 

Jan. soymeal futures finished $3.90 per short ton higher at $396.90.

Jan. soy oil futures closed 0.62¢ at 37.72¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.83 per barrel higher (+4.25%) at $44.89. The U.S. dollar is lower, and the Dow Jones Industrials are 418 points higher (+1.41%) 30,009 points.

Britt O’Connell, ever.ag, says that investors prepare for a holiday break.  

“Traditionally, the week of Thanksgiving is a short and quiet trading week. This year, it also includes first notice day for Dec corn. Most elevators will be looking to have short Dec positions rolled out by the week’s end and transitioning to bids vs. the March contract. At times, this can cause a bit of a wonky trade, as the emphasis is largely spread trading.”  

O’Connell added, “Last week, there were some whispers circulating that China had cancelled a few orders of U.S. soybeans. This morning that rumor substantiated and likely gave the market part of its softer tone. It’s not unusual for China to cancel purchases and given the tightening of crush margins in China, not necessarily a surprise. Until there is more certainty around the crop in SA, I would not expect a flurry of cancellations nor a dramatic change in the tone of the trade.”  

“With the funds holding a large long position, my hunch is they will maintain long; they have reason not to – a large crop in South America. Planting progress is on pace – the only question that remains now is weather.  Without much subsoil moisture timely rains will be considered essential.  The market could react rather dramatically as the weather develops in S.A,” O’Connell says.

Al Kluis, Kluis Advisors, says that investors begin to size up what the USDA might peg South America’s crop size.

“The USDA will again raise corn and soybean export projections in the December 12 supply/demand report. U.S. export sales for corn are at 52% above the five-year average of 38%. Soybean sales are already at 86%. If this pace continues, then exports may be 50 to 70 million bushels larger than the November estimate,” Linneman told customers in a daily note.    

He added, “I am watching private trade estimates for the crop size in South America. One of my most respected sources has reduced the corn crop in Argentina by 1 million metric tons (mmt) again this week. Soybean production in Argentina was taken 1 mmt lower. For Brazil, the corn and soybean crop is unchanged from last week. The total corn crop in South America is now down 6 mmt (about 240 million bushels) from the last USDA report. The total soybean crop is down 3 mmt (110 million bushels) from the last USDA report.”

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Monday’s Grain Market Review

On Monday, the CME Group’s soybean market closes double-digits higher, corn and wheat follow.

At the close, the Dec. corn futures finished 3¼¢ higher at $4.26¾. March corn futures closed 5¢ higher at $4.33. 

January soybean futures closed 10½¢ higher at $11.91½. March soybean futures ended 11¼¢ higher at $11.92½.

The Jan. futures soybean contract reached $12.00 per bushel, overnight, for the first time since June 10, 2016.

If futures move past $12.08½, it would be the highest price since June 30, 2014, according to Reuters news service. 

March wheat futures closed 5¢ higher at $6.04½. 

Jan. soymeal futures ended $0.50 per short ton higher at $393.00.

Jan. soy oil futures closed unchanged at 38.34¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.60 per barrel higher (+1.41%) at $43.02. The U.S. dollar is higher, and the Dow Jones Industrials are 264 points higher (+0.90%) 29,528 points.

On Monday, private exporters reported to the USDA export sales of 334,000 metric tons of corn (13.0 million bushels) for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Al Kluis, Kluis Advisors, says that investors remain concerned about Argentina’s corn crop.

“Today, in China on the Dalian, corn futures are 3¢ higher at $9.63 per bushel, and soybean futures are 32¢ higher at $21.04 per bushel. In the U.S. globex overnight grain trade, prices are higher on increased weather concerns in Argentina,” Linneman told customers in a daily note.    

He added, “I am watching the December Corn and January soybean charts today. The key price levels that need to hold are $4.17 in December corn and $11.76 in November soybeans. Resistance above the market is at $4.29 for December corn and at $12.08 (the 2016 high) for soybeans.”

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