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Friday’s Ag Markets Fade

Profit-taking drops prices.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets lean lower.

At the close, the May corn futures finished 2½¢ lower at $3.86¼. July futures finished 2¾¢ lower at $3.94.

May soybean futures closed 6½¢ lower at $10.54¼.  July soybean futures finished 6½¢ lower at $10.65¼.

May wheat futures finished 8½¢ lower at $4.72.

May soy meal futures ended $0.60 per short ton lower at $382.80. January soy oil futures closed 0.15¢ lower at 31.48¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.41 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 46 points lower.

Pete Meyer, SPGlobal analyst, says that the bulls need to be fed and that is not happening today.

“So after the Argentina import news earlier in the week, the soybean market is in search of more. The oilseed weakness may also have something to do with the snow in the northern Plains and elsewhere,” Meyer says. 

Spring wheat acreage would appear to be moving to soybeans as a result, but it’s unclear if people are thinking that far ahead, Meyer says. 

“Corn is merely following wheat, which failed to break through $5.00 in SRW earlier in the week,” Meyer says.

He adds, “Overall, it feels like a little risk is being taken off the table by those that don’t know what Trump’s Twitter account will come up with next.  Lots of confusion in the markets, and that’s causing some reduction in positions.”

Brian A. Rydlund, CHS Hedging market analyst, says that today’s market action looks like a “relax, exhale” day.

“There is not much new news to spur things,” Rydlund says.

Wheat is lower on rain ideas for HRW country that look more promising ahead, Rydlund says.

“Planting for the hard red spring wheat country still looks slow, with no break in cool, wet pattern,” Rydlund says.

On Monday, the USDA Crop Progress Report is expected to show even slower planting in the Midwest.

“The Corn Belt looks continued cool and wet, with some hinting at a pattern change by month end. Corn planting progress on Monday’s report will reflect the slow start, as we begin to show the falling behind thing we all know,” Rydlund says.

Cash markets are firm as the grower-selling has been quiet. So, the “market” needs to buy hedged inventories now, and that takes basis pushes, which we see happening in both corn and beans,” Rydlund says.

 

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Thursday’s Grain Markets Review

On Thursday, the CME Group’s corn and soybean markets stay in the green due to global demand.

At the close, the May corn futures finished 1¾¢ higher at $3.88¾; July futures finished 1½¢ higher at $3.97¼.

May soybean futures closed 13¢ higher at $10.60¾; July soybean futures finished 13¢ higher at $10.71¾.

May wheat futures closed 6¼¢ lower at $4.81.

May soy meal futures closed $3.20 per short ton higher at $383.40. January soy oil futures closed 0.10¢ higher at 31.63¢ per pound. 

In the outside markets, the NYMEX crude oil market is 29¢ higher, the U.S. dollar is higher, and the Dow Jones Industrials are 330 points higher.

On Thursday, the USDA released its Weekly Export Sales Report showing soybean sales beat expectations, corn within, and wheat below expectations.

  • Wheat: 188,700 metric tons (mt) vs. the trade’s expectation of between 250,000 and 650,000 mt
  • Corn: 895,900 mt vs. the trade’s expectation of between 800,000 and 1,350,000 mt
  • Soybeans: 2.464 million mt vs. the trade’s expectation of between 800,000 and 1,700,000 mt
  • Soybean meal: 317,400 mt vs. the trade’s expectation of between 175,000 and 400,000 mt  

Jack Scoville, The PRICE Futures Group’s senior market analyst, says export sales for beans were fabulous.

“And this is really driving the complex today. Plus, all the sales this week on the daily system, with Argentina buying, has created new interest lately,” Scoville says.  

Wheat had bad sales, putting pressure on the market.

“The U.S. has a bad wheat crop, but it is hard to rally prices when we are already not competitive in the world market. So, a battle is on there, bad supply vs. bad demand,” Scoville says.

Corn is kind of caught in between, Scoville says.

“Although export sales were disappointing, investors are keeping an eye on the planting weather and the fact that it remains too cold and wet to get going here in the Midwest.”

Al Kluis, Kluis Commodities, says the soybean market showed promise, yesterday, but then sold off. Now, he's wondering about today's pattern.

"Soybeans, the last two days, have shown some strength from some unexpected demand from Argentina, but ended up closing near the lows in the day. Some of the nervousness in the grain markets this week is likely the effects of tensions rising between the U.S., Russia, and Syria," Kluis stated in a daily note to customers Thursday. 

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm futures sell off.

At the close, the May corn futures finished 2¼¢ lower at $3.87; July futures finished 2¢ lower at $3.95¾.

May soybean futures closed 2¼¢ lower at $10.47¾; July soybean futures finished 1½¢ lower at $10.58¾.

May wheat futures ended 4¾¢ lower at $4.87¼.

May soy meal futures finished $3.70 per short ton lower at $380.20. January soy oil futures finished 0.32¢ lower at 31.53¢ per pound. 

In the outside markets, the NYMEX crude oil market is $1.31 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 135 points lower.

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

  • Export sales of 120,000 metric tons of soybeans for delivery to Argentina during the 2018/2019 marketing year 
  • Export sales of 141,518 metric tons of soybeans for delivery to Mexico during the 2018/2019 marketing year  

The marketing year for soybeans began September 1.

Al Kluis, Kluis Commodities, says today’s markets are reflective of Tuesday’s USDA report that was bullish soybeans, bearish wheat, and neutral to slightly bullish corn.

“Wheat traders went back to trading weather, while corn traders continue to be content at current prices (even with a less-than-ideal start to planting season in many areas). Soybeans likely left a few traders wondering how prices only ended the day marginally higher,” Kluis stated to customers Wednesday in a daily note.

Kluis added, “The soybean bulls got everything they could have hoped for in the report on Tuesday. However, prices only managed to close 2¢ to 4¢ higher. The bulls need to keep making new highs, or risk losing momentum traders.”

Going forward, Kluis expects to keep an eye on price spreads.

“The bull spreads in grains can often be leading indicators to where the market is headed. The recent high in the November 2018 vs. November 2019 soybean spread needs to be surpassed soon, or we could see the bears take back control,” Kluis stated.

Don Roose, U.S. Commodities, says Argentina, the largest soy meal exporter in the world, is in need of soybeans to crush because its crop is suffering from a drought.

“Also, basis levels in Brazil have been very strong on soybeans. So, U.S. soybeans are competitive,” Roose says. “Plus, all end users and resellers are trying to stock or overstock soybeans, believing that China will be a market if trade issues develop with the U.S.”

Meanwhile, Roose, in China this week, says there is a lot of trade chatter there.

“End users and crushers are extending their soybean coverage in China, too. The agribusinesses in China believe that their government will help them financially, in any trade dispute with the U.S. Food is way too important,” Roose says.

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Tuesday’s Grain Market Review

At the close, the May corn futures finished 1¼¢ lower at $3.89¼; July futures finished 1¼¢ lower at $3.97¾.

May soybean futures closed 3¢ higher at $10.50; July soybean futures closed 2¾¢ higher at $10.60.

May wheat futures closed 1¼¢ higher at $4.92.

May soy meal futures finished $5.70 per short ton lower at $383.90. January soy oil futures settled 0.33¢ higher at 31.85¢ per pound. 

In the outside markets, the NYMEX crude oil market is $2.02 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 439 points higher.

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

  • Export sales of 120,000 metric tons of soybeans for delivery to Argentina during the 2018/2019 marketing year 
  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2018/2019 marketing year
  • Export sales of 279,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year 

The marketing year for soybeans began September 1.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm futures start the week stronger.

At the close, the May corn futures finished 2¼¢ higher at $3.90¾; July futures ended 2¢ higher at $3.99.

May soybean futures settled 13¼¢ higher at $10.47; July soybean futures closed 12¾¢ higher at $10.57½.

May wheat futures closed 18½¢ higher at $4.90¾.

May soy meal futures closed $3.30 per short ton higher at $389.60. January soy oil futures ended 0.01¢ lower at 31.52¢ per pound. 

In the outside markets, the NYMEX crude oil market is $1.33 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 322 points higher.

Al Kluis, Kluis Commodities, says the farm markets have a lot of trade and weather factors influencing direction.

“The rally back in soybeans on Friday tells me that a lot of negotiations are developing in Washington to help avoid a trade war,” Kluis stated to customers in a daily note on Monday.    

He adds, “Will the deferred weather forecasts keep it wet in the central and eastern Corn Belt and put additional snow in Minnesota and the Dakotas where they need to plant spring wheat by the end of the month?”

On Monday, private exporters reported to the USDA export sales of 232,500 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year.

The marketing year for soybeans began September 1. 

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