Grain futures close lower

Futures close lower while stock market reacts strongly to coronavirus.

Des Moines, Iowa -- At the close of Friday’s trading grain futures ended lower.                      

March corn futures closed 1½¢ lower at $3.77.  May corn settled 2¢ lower at $3.80¾.
 
March soybean futures ended 2¼¢ lower at $8.90½. May soybean futures were 2¢ lower at $8.99.

March wheat futures closed 9¢ lower at $5.51.

March soymeal futures closed $3.70 per short ton lower at $289.20 per short ton. March soy oil futures settled 0.52¢ higher at 30.64¢ per pound.

Matt Tranel, an advisor with the Commodity Risk Management Group, offers this background on today's trading:

"Today the USDA released it's annual Agricultural Outlook Forum.  It's the first report that the USDA releases to give the market an idea of where they see acreage, trend line yield, supply, demand, and ending stocks.  These numbers will be changed throughout the course of the 2020 growing season and following reports.  As the trade was expecting, big acres are seen for corn at 94 million and soybean acreage is thought to be 85 million.  Using a trend line yield of 178.5 bushels for corn and accounting for supply/demand, ending stocks are projected at 2.637 million for 2020.  These numbers were expected in today's release but failed to get traders excited on the buy side.  Soybean trend line yield is placed at 49.8 bushels and ending stocks are projected at 320 million.  These numbers were in line with projections and thus prices returned to home base where they've been trading comfortably for a month now."

In the outside markets, the NYMEX crude oil market is $0.50 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 266 points lower.

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Des Moines, Iowa -- At mid-session Friday, grain futures are back in negative territory.

During late morning trading, March corn futures are down by 2¢ at $3.76½. May corn is 2¼¢ lower at $3.80½.
 

March soybean futures are 2¼¢ lower at $8.90½. May soybean futures are 1½¢ lower at $8.99½.

March wheat futures are 2¼¢ lower at $5.57¾.

March soymeal futures are $2.60 per short ton lower at $290.30 per short ton. March soy oil futures are 0.42¢ higher at 30.54¢ per pound.

“It looks like the negative economic effects of coronavirus are outweighing, for the time being, what seemed like pretty friendly USDA projections in grains, most especially soybeans,” says Sal Gilbertie of Teucrium Trading, LLC.

“Grains are behaving quite well in the face of negative financial news around the world, which could be a precursor for things to come once corona virus fears have abated,” he adds. “Grain fundamentals look pretty good, and grains don’t generally correlate too closely with stocks, as is evident today.”

In the outside markets, the NYMEX crude oil market is $0.55 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 177 points lower.

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Des Moines, Iowa -- In early trading Friday, grain futures are modestly higher, recovering most of Thursday’s losses, due, in part, to strong corn export numbers from USDA.

March corn futures are up by 1¼¢ at $3.79¾; May corn is 1¢ higher at $3.83¾.

March soybean futures are 3¾¢ higher at $8.96½; May soybean futures are 3¼¢ higher at $9.04¼.

March wheat futures are 5¾¢ higher at $5.65¾.

March soy meal futures are 80¢ per short ton higher at $293.70. March soy oil futures are 0.16¢ lower at 30.28¢ per pound.

In the outside markets, the NYMEX crude oil market is 92¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 289 points lower.

Al Kluis, Kluis Commodity Advisors, expects grain prices to remain in a narrow trading range. “EIA data released showed ethanol inventories are the largest they have ever have been putting a little pressure on corn market,” he says.

Better news comes from USDA’s weekly Export Sales Report Friday, which showed strong corn demand.

Corn: 1.25 million metric tons (mt) vs. the trade’s expectations of  700,000-1.25 mmt

Soybeans: 497,700 mt vs. the trade’s expectations of 700,000-1.2 mmt 

Wheat: 406,400 mt vs. the trade’s expectations of 450,000-700,000 mt

Soy meal: 169,400 mt vs. the trade’s expectations of  200,000-400,000 mt 

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Thursday’s Grain Markets Review

DES MOINES, Iowa -- On Thursday, the CME Group’s farm markets close lower.

At the close, March corn futures finished 2¢ lower at $3.78½; May corn futures settled 2½¢ lower at $3.82½.
 
March soybean futures settled 4½¢ lower at $8.92¾; May soybean futures closed 4½¢ lower at $9.01.

March wheat futures ended 5½¢ lower at $5.60.

March soy meal futures closed 10¢ per short ton lower at $292.90. March soy oil futures closed 0.22¢ lower at 30.12¢ per pound.

In the outside markets, the NYMEX crude oil market is 41¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 153 points lower.

Al Kluis, Kluis Advisors, says the grain markets continue to look for some direction.
 
“The positive from Wednesday was that U.S. grain prices shrugged off early weakness and closed mixed. As China gets ready to grant some waivers of import tariffs on a lot of U.S. products, the market seems to be finding support. However, until we start seeing more demand, grain prices are going to continue to drift sideways,” Kluis told customers in daily note.

On Thursday, USDA Secretary Sonny Perdue said he expected Chinese purchases would “start...ramping up in the spring” when asked about the disparity between the new USDA estimate of $14 billion and the Sino-U.S. agreement.

“We do believe those numbers will be surpassed,” Perdue stated.

READ MORE: USDA raises export forecast for China by $4 billion

Kluis added, “Keep an eye on crude oil prices. A rise in crude oil prices tends to support all commodities. Funds are holding short positions in corn and soybeans. Rising energy prices could trigger the funds to exit those positions.”

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Wednesday’s Grain Markets Review

On Wednesday, the CME Group’s farm markets remain mostly lower, with the exception of the soybean market turning positive.

At the close, March corn futures finished 2½¢ lower at $3.80; May corn futures closed 2¼¢ lower at $3.85.

March soybean futures settled 5¢ higher at $8.97¼; May soybean futures closed 3¼¢ higher at $9.05½.

May soy meal futures settled 80¢ per short ton higher at $293.00. May soy oil futures finished 0.14¢ lower at 30.34¢ per pound.

March wheat futures finished 1½¢ lower at $5.65¼.

In the outside markets, the NYMEX crude oil market is $1.31 per barrel higher, the U.S. dollar is lower, and the Dow Jones Industrials are 144 points higher.

Jack Scoville, The Price Futures Group’s senior grain analyst, says today’s markets represent a consolidation trading day. 

“No one is sure when China will actually start buying, despite news yesterday that the reduced tariffs regime will kick in the first of next month. That does not mean the Chinese will buy here, but they can start. Been a kind of two-sided and quiet spec trade so far, and no one seems too interested in doing anything big. Wheat is lower after going too high yesterday. That is dragging on the corn ,as well. Beans kind of mixed with all eyes still on Brazil. Been a little wet down there, so harvest is still delayed. Still very big harvest, but delayed, and maybe some buyers are looking less at ports down there right now,” Scoville says.

Al Kluis, Kluis Advisors, says investors want to know if the strong wheat trade this week will bleed over into the corn and soybean markets.

“The wheat bulls started the week off with some much-appreciated friendly news. The Australian wheat crop was reported at 15.7 million metric tons. This was below traders’ expectations and happens to be the smallest crop since 2008. Corn was able to move higher with the strength in wheat. However, soybeans ended the day slightly lower. Does this trade action mean the funds are willing to engage in the long corn and wheat while going short soybeans? We have discussed this spread a few times this winter and it looks like it is still worth watching,” Kluis told customers in daily note.

Kluis added, “There is a headline that China is going to grant tariff exceptions starting March 2 on nearly 700 U.S. goods. This is a great sign for the bulls. For now, it looks like soybeans and pork made this initial list. It would be nice to hear chatter develop out of the Pacific Northwest that would give this news some validity. ”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s wheat market explodes higher.

At the close, March corn futures finished 5¼¢ higher at $3.83; May corn futures closed 5½¢ higher at $3.87½.
 
March soybean futures closed 1½¢ lower at $8.92¾; May soybean futures ended 1¢ lower at $9.02½.

March wheat futures closed 23½¢ higher at $5.66¾.

March soy meal futures closed $1.10 per short ton higher at $292.20. March soy oil futures settled 0.09¢ lower at 30.48¢ per pound.

In the outside markets, the NYMEX crude oil market is 11¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 159 points lower.

Louise Gartner, Spectrum Commodities, says the wheat market is moving on China news.

“It seems to be the news that China is offering tariff-free licenses to purchase 696 different U.S. goods starting today. There seems to be a general sentiment that China will buy a lot of wheat in an effort to show good faith with its WTO agreement (to buy 9 million metric tons/year, which seems improbable that it would be that much). That said, ASF and the coronavirus are hitting the country hard and it needs food.
 
She added, “Also, Australia lowered its production estimate again by 600,000 metric tons, but I don’t think that would move the market this much,” Gartner says.

Al Kluis, Kluis Advisors, says investors will be watching the progress of the soybean market.     

“Keep an eye on the $9 price level in the nearby soybean futures contract. A close above $9 will open the door for a test of $9.20. The ability of the soybean market to rally last week – even with all of the negative fundamental news – is a positive indicator for soybean prices,” Kluis stated in a daily note to customers.

The USDA’s Weekly Export Inspection report on Tuesday shows strong demand.

Corn inspections, last week, came in at 795,000 tonnes vs. an expected range of 600,000 to 800,000 tonnes.

For soybeans, 992,000 tonnes were inspected vs. the trade’s exceptions of 700,000 to 1.25 million tonnes.

U.S. wheat inspections totaled 502,000 tonnes vs. the expectations of 400,000 to 600,000 tonnes.

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