Ag markets reverse to mostly lower Friday

Fresh corn, soybean sales underpin Friday’s trade.

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

At the close, the Dec. corn futures closed 2½¢ lower at $4.06½. March corn futures ended 1¢ lower at $4.13¾. 

January soybean futures closed 2¼¢ lower at $11.01¼. March soybean futures finished 1¼¢ higher at $10.99¼.

Dec. wheat futures closed 7¼¢ lower at $6.02. 

Dec. soymeal futures closed $5.40 per short ton lower at $382.40.

Dec. soy oil futures ended 0.13¢ lower at 35.34¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.67 per barrel lower (4.31%) at $37.12. The U.S. dollar is lower, and the Dow Jones Industrials are 88 points (0.31%) lower at 28,301 points.

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

  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 272,150 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 206,900 metric tons of corn received during the reporting period for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 30,000 metric tons of soybean oil for delivery to South Korea during the 2020/2021 marketing year.
  • The marketing year for corn and soybeans began Sept. 1; soybean oil began Oct. 1.

Bob Linneman, Kluis Advisors, says that investors are watching to see if yesterday’s gains can be sustained.

“Soybeans led the way as futures broke over and closed above the $11 mark. Corn futures also saw a strong push higher during the day, however, the bulls were unable to break over the October 27 high. The strong move in the grain markets is occurring while the U.S. stock market rallies toward the recent highs. Although the grains have been able to ward off any outside market influence recently, we should still keep a watch out for any headline that pushes the stock market aggressively lower. Money flow could still impact the grains in the short term,” Linneman told customers in a daily note.    

He added, “Reports on Thursday that China may import upwards of 22 million metric tons of corn is far more than the current USDA target of 7 million. If this report is validated, then the balance sheet for U.S. corn has the potential to get very interesting in coming months.”

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On Thursday, the CME Group’s farm markets see a lot of green.

At the close, the Dec. corn futures finished 4¢ higher at $4.09¾. March corn futures ended 3½¢ higher at $4.14¾. 

January soybean futures finished 17½¢ higher at $11.03¾. March soybean futures settled 18¢ higher at $10.98.

Dec. wheat futures finished 3¼¢ higher at $6.09¼. 

Dec. soymeal futures closed $2.10 per short ton higher at $387.80.

Dec. soy oil futures closed 1.08¢ higher at 35.47¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.57 per barrel lower (1.46%) at $38.58. The U.S. dollar is higher, and the Dow Jones Industrials are 583 points higher at 28,390 points.

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

  • Export sales of 106,000 metric tons of sorghum for delivery to China during the 2020/2021 marketing year.
  • Export sales of 33,000 metric tons of soybean oil for delivery to India during the 2020/2021 marketing year.

The marketing year for sorghum began Sept. 1; soybean oil began Oct. 1.

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures.

  • Corn = 3.15 million metric tons vs. the trade’s expectations of between 700,000 mmt and 1.5 mmt. Mexico and China were the biggest buyers.
  • Soybeans = 1.53 million metric tons. vs. trade’s expectations of 1.0 mmt to 2.0 mmt. Of that total, China bought 810,700 mt.
  • Wheat = 597,100 mt. 
  • Soybean meal = 331,400 mt.

The marketing year for corn began Sept. 1.

Bob Linneman, Kluis Advisors, says that investors want to see more attention put on exports vs. the election results.

“The presidential election is still undecided as of this morning. Soybean prices shot higher on Wednesday. The most likely catalyst is the return of the drier forecast for South America. Recent rain events did not unfold as expected and the near-term forecast is not ideal. The La Niña weather condition is looking to take hold of the weather pattern. This has historically meant a drier growing season. Many traders suspect that South American farmers are heavily pre-sold on this year’s crop, which could lead to problems down the road if production falls short of targets,” Linneman told customers in a daily note.    

He added, “Some analysts in the grain export industry are concerned that China may try to cancel some of the sales that have been front-loaded on the books. However, with the current weather and planting delays in South America, it is unlikely we will see cancellations until the world soybean supply estimates stop declining.”

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Wednesday’s Grain Market Review

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

At the close, the Dec. corn futures settled 4¼¢ higher at $4.05¼. March corn futures ended 5¼¢ higher at $4.11¾. 

January soybean futures finished 22¢ higher at $10.86¼. March soybean futures closed 22¢ higher at $10.79.

Dec. wheat futures settled 2¢ lower at $6.06. 

Dec. soymeal futures closed $8.50 per short ton higher at $385.70. Dec. soy oil futures finished 0.61¢ higher at 34.39¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.37 per barrel higher (3.64%) at $39.03. The U.S. dollar is higher, and the Dow Jones Industrials are 447 points (1.63%) higher at 27,927 points.

Bob Linneman, Kluis Advisors, says that investors want to see more attention put on exports vs. the election results.

“The presidential election is still up in the air. There are a few swing states that are just too close to call as of 4:50 this morning. This uncertainty has not caused the outside markets to swing as wildly as many expected. Is this a calm before the storm? Or are market participants comfortable with either candidate’s ability to lead the economy? Grain traders want to see the spotlight shift from election headlines to exports,” Linneman told customers in a daily note.    

He added, “The slide in oil prices on Monday put prices at the lowest level since late May. This decline triggered comments from OPEC. It discussed cutting production to account for slowdown in demand (due to countries closing down due to the coronavirus). For the short-term, this has stabilized the oil market.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets follow soybeans higher.

At the close, the Dec. corn futures closed 3¼¢ higher at $4.01¾. March corn futures settled 4¼¢ higher at $4.06¾. 

January soybean futures ended 12¢ higher at $10.64¼. March soybean futures ended 12½¢ higher at $10.57¼.

Dec. wheat futures closed ½¢ higher at $6.08. 

Dec. soymeal futures closed $2.10 per short ton higher at $377.20. Dec. soy oil futures finished 0.59¢ higher at 33.78¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.97 per barrel higher (2.64%) at $37.78. The U.S. dollar is lower, and the Dow Jones Industrials are 530 points (2.06%) higher at 27,479 points.

Jack Scoville, PRICE Futures Group, says that the market is higher, due to an end of fund-selling. 

“Traders are also building in a Biden win, which is thought to be good for demand and especially China demand. It’s thought that the Chinese hate Trump and would reward Biden. Truth is they need the grain and will keep buying either way. A Biden win and control of the Senate by the Democrats also implies a bigger stimulus, which is affecting all markets today,” Scoville says. 

The USDA Crop Progress report showed corn harvest at 83% complete, soybeans at 87% complete and winter wheat crop rating showed winter wheat crop rated 43% good to excellent. 

Al Kluis, Kluis Advisors, says that investors will be eyeing demand for U.S. soybeans, following the U.S. election. 

“China will step in and start to buy soybeans after the election. U.S. soybeans priced out of the Pacific Northwest are lower cost than either Brazilian or Argentine soybeans. Today, nearby soybean futures closed at over $20 per bushel on the Dalian Commodity Exchange in China, so our soybeans look undervalued. China has a history of being a disciplined ‘scare-down’ value buyer,” Kluis told customers in a daily note.    

He added, “I am watching the weekly export sales of corn and soybeans in the Thursday USDA Export Sales report. Currently, corn exports are 755 million bushels above last year and soybean exports are more than 1 billion bushels above this date last year. Let’s see if China starts buying in this week’s export sales report.”

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Monday’s Grain Market Review

On Monday, the CME Group farm markets finish mostly lower, ahead of Election Day.

At the close, the Dec. corn futures finished 1¢ lower at $3.97. March corn futures finished 1½¢ lower at $4.01¾. 

January soybean futures ended 4¢ lower at $10.52¼. March soybean futures settled 2¾¢ lower at $10.45¼.

Dec. wheat futures closed 9¢ higher at $6.07¾. 

Dec. soymeal futures settled $3.50 per short ton lower at $375.10. Dec. soy oil futures closed 0.42¢ lower at 33.19¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.00 per barrel higher (2.79%) at $36.79. The U.S. dollar is higher, and the Dow Jones Industrials are 358 points (1.35%) higher at 26,859 points.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says that investors are still operating under the influence of the key reversal from last week.  

“Globally fears are mounting as COVID-19 infection rates rise and the possibility of government imposed lockdowns remain camped at the front of traders’ minds. Better weather in South America has also given the bulls pause, but investors are waiting to jump back should weather appear to pose further threats to yield and or acres.  Rumors were circulating this morning that cargoes of both corn and soybeans are headed to Brazil – not surprising if true, considering they have lifted import tariffs. With the election just one day away, markets could be poised to react rather quickly and with added volatility,” O’Connell says.

On Monday, private exporters reported to the USDA export sales of 204,000 metric tons of corn 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 in a holding pattern. 

“The macro markets remain negative. Global stock and energy markets moved lower as more countries expand the lockdown. On Friday, the grain markets closed mixed with corn and wheat lower, and soybeans slightly higher,” Linneman told customers in a daily note.    

He added, “With the election tomorrow, traders will get short, buy puts, or move to the sidelines. With the earlier sales you have in place, there is nothing to do now but wait for the election results – and the market reaction – later this week.”

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