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Corn, Soybean Markets Diverge Friday

China’s tariff news creates sell-off mentality.

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

On Friday, China announced $60 billion worth of tariffs on imported U.S. products, as a retaliatory measure against Chinese imported goods into the U.S.

At midsession, the September corn futures are 3¼¢ higher at $3.70. December futures are 3¢ higher at $3.84.

Sep. soybean futures are ¾¢ lower at $8.86. November soybean futures are ¾¢ lower at $8.96.

September wheat futures are ¾¢ lower at $5.59.

August soymeal futures are $1.60 per short ton lower at $329.90. September soy oil futures 0.18¢ higher at 28.47.

In the outside markets, the NYMEX crude oil market is $0.77 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 84 points higher.

On Friday, private exporters reported to the U.S. Department of Agriculture the following activity:

• Optional origin sales of 130,000 metric tons of corn for delivery to Vietnam 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.

Al Kluis, Kluis Advisors, says that the main market driver now will be if the U.S. and China can get to the table and discuss trade.

“Keep an eye on any trade talk out of Washington,” Kluis stated in a daily note to customers.

Kluis added, “With the weather forecast we have for August, we could see national soybean yields eclipse 50-plus bushels per acre. That would give us carryover stocks in excess of 700 million bushels next year.”

 

 

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets were hit by a sell-off mentality, late in the session, paring gains.

At the close, the September corn futures finished 1¾¢ higher at $3.66. December futures ended 1¾¢ higher at $3.81.

September soybean futures settled 4½¢ lower at $8.87. November soybean futures settled 4¼¢ lower at $8.97½.

September wheat futures ended 2½¢ higher at $5.60½.

August soy meal futures closed $3.50 per short ton lower at $331.00. September soy oil futures are 0.33¢ lower at 28.29.

In the outside markets, the NYMEX crude oil market is $1.25 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 11 points lower.

On Thursday, the USDA released its Weekly Export Sales Report. Corn sales came in at the high end of expectations. Soybean sales showed some weakness.

  • Corn = 1.27 million metric tons vs. the trade’s expectations of between 700,000 and 1,300,000 mt.
  • Soybeans = 637,000 mt. vs. the trade’s expectations of between 400,000 and 1,200,000 mt.  
  • Soybean meal = 80,300 mt. vs. the trade’s expectations of between 50,000 and 300,000 mt.
  • Wheat = 382,500 mt. vs. the trade’s expectations of between 200,000 and 500,000 mt.

 

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Wednesday’s Grain Market Review

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

At the close, the September corn futures finished 7¼¢ lower at $3.65. December futures closed 7¢ lower at $3.79½.

September soybean futures settled 17¼¢ lower at $8.91½. November soybean futures ended 17¼¢ lower at $9.01¾.

September wheat futures closed 4½¢ higher at $5.58.

August soymeal futures settled $5.40 per short ton lower at $334.50. September soy oil futures closed 0.35¢ lower at 28.95.

In the outside markets, the NYMEX crude oil market is $1.12 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 98 points lower.

In Agriculture.com’s “3 Big Things” today, it was reported that the Trump administration may be considering raising levies on the $200 billion in Chinese goods, on which it plans to impose tariffs from 10% to 25%, according to reports from several news outlets.

The news was first reported by Bloomberg. China said overnight it would again retaliate if the U.S. moves forward with that plan.

Al Kluis, Kluis Advisors, says that investors are watching the trade tariff news.

“The (market) bears are hoping China will continue to play hardball. Otherwise, the door may not be big enough, if a trade deal is reached in the short term. Funds were short roughly 61,000 contracts as of last Friday’s Commitments of Traders report,” Kluis stated in a daily note to customers Wednesday.

 

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets showcase a strong soybean market.

At midsession, the September corn futures are 2¢ higher at $3.69. December futures are 2¼¢ higher at $3.83.

August soybean futures are 22¼¢ higher at $9.03. November soybean futures are 22¢ higher at $9.13.

September wheat futures are 1½¢ higher at $5.48.

August soymeal futures are $5.90 per short ton higher at $338.80. September soy oil futures are 0.46¢ higher at 28.92.

In the outside markets, the NYMEX crude oil market is $1.10 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 162 points higher.

Jason Roose, U.S. Commodities, says the price rally is multifaceted.

“Grains are adding risk premium today with thoughts of positive export talks with China and Europe, tight world grain stocks, and a dry weather forecast,” Roose says.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm markets started the week on a stronger note.

At the close, September corn futures finished 5¼¢ higher at $3.67; December futures closed 5¢ higher at $3.81¼.

August soybean futures finished 4½¢ higher at $8.75; November soybean futures closed 5¾¢ higher at $8.91.

September wheat futures closed 16¢ higher at $5.46½.

August soy meal futures closed $1.10 per short ton higher at $332.90. August soy oil futures closed 0.21¢ lower at 28.46¢.

In the outside markets, the NYMEX crude oil market is $1.25 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 94 points lower.

Mike North, president of Commodity Risk Management Group, says the markets continue to get underpinned by poor wheat crops.

“Ongoing support from a lesser-than-expected Spring Wheat Tour (tour results forecast 41.1-bushel yield vs. five-year average of 45.4 vs. USDA current forecast of 47.6), together with increasing weather premiums borne of increased dryness amid sporadic rain showers in the U.S., ongoing growth of the EU drought, and central areas of north China plain badly needing rain,” North says.

Allendale’s Paul Georgy said in a morning note on Monday that news outlets are reporting some Chinese firms are shutting processing plants due to a lack of soybeans. Processors in the Asian country are paying a $47 to $57 premium for South American beans vs. U.S. beans and slowed their buying pace in the last week, he said.

Read more at 3 Big Things, July 31, 2018.

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