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Soybeans, Grains Close Higher on Argentina Weather, Upward Trend

Outside markets are favorable.

Corn and soybeans closed higher on Friday amid concerns about dry weather in Argentina. Wheat rose on a tender from Saudi Arabia. 

The six- to 10-day forecast is calling for drier weather in growing regions of Argentina, which may harm production prospects in the South American country. Prices also rose as the trend turned upward, analysts said.

“The corn market found some buying support with a few pieces of supportive news including concerns about Argentine rainfall with evidence growing that this winter’s La Niña may be a bit stronger than had earlier been thought. Also supportive, rising cash prices in South America, the likelihood that a secondary low is in the corn market now that first notice day has come and gone for the December contract, the fact that both the trend and momentum indicators turned higher after yesterday’s trade, and concern that the record-large fund short position could prompt a solid short covering rally into the end of the year,” said Tomm Pfitzenmaier, the president of Summit Commodity Brokerage in Des Moines. 

Corn futures for March delivery closed up 3¼¢ to $3.59 a bushel on the Chicago Board of Trade. 

Soybeans for January delivery added 8¼¢ to $9.94 a bushel. Soymeal gained $3.70 a short ton, and soy oil fell 0.12¢ to 33.73¢ a pound.

Wheat futures rose after Saudi Arabia issued a tender for almost 500,000 metric tons of milling wheat on Thursday. 

Chicago wheat gained 5¾¢ to $4.38¾ a bushel. Kansas City futures for March delivery gained 5¾¢ to $4.37¼ a bushel.

In the outside markets, West Texas Intermediate and Brent crude futures each added 1.7%. The dollar fell 0.2%, which benefits U.S. goods, while stocks dropped.

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Thursday’s Grain Market Review

 

DES MOINES, Iowa -- On Thursday, the CME Group’s soybean market failed to gain any traction from stronger sales.

At the close, the March corn futures finished 2¼¢ higher at $3.55¾. May futures settled 2¼¢ higher at $3.63.

January soybean futures ended 6¾¢ lower at $9.85. March soybean futures settled 6½¢ lower at $9.97.

March wheat futures closed 1¾¢ lower at $4.33.

January soy meal futures finished $0.80 per short ton lower at $326.50. January soy oil futures closed 0.22¢ lower at 33.85¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.01 higher, the U.S. dollar is lower, and the Dow Jones Industrials are 307 points higher.

Jason Roose, U.S. Commodities, says Brazil’s weather is pressuring prices.

“Soybeans are trading weaker today in a thin holiday trading range due to favorable weather in Brazil, anticipating negative export shipment numbers and larger base acres projected for next year,” Roose says.

On Thursday, the USDA Weekly Export Sales Report showed lackluster demand, except for soybeans.

  • Wheat = 187,400 metric tons vs. the trade’s expectations of between 250,000 and 500,000 metric tons
  • Corn = 599,200 mt. vs. the trade’s expectations of between 700,000 and 1,300,000 metric tons
  • Soybeans = 942,900 mt. vs. the trade’s expectations of between 700,000 and 1,200,000 metric tons 
  • Soybean meal = 178,600 mt. vs. the trade’s expectations of between 100,000 and 350,000 metric tons

On Thursday, the USDA announced fresh export sales for soybeans.

  • Export sales of 525,000 metric tons of soybeans for delivery to China during the 2017/2018 marketing year
  • Export sales of 132,000 metric tons of soybeans for delivery to unknown destinations during the 2017/2018 marketing year
  • Export sales of 110,000 metric tons of grain sorghum for delivery to China during the 2017/2018 marketing year 

The marketing year for soybeans and sorghum began September 1.

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Wednesday’s Grain Market Review

Wheat futures closed higher on Wednesday amid expectations for reduced planting, while corn prices improved.

The USDA said in a report on Tuesday that it expects growers to plant 45 million acres with wheat next year, the lowest since at least 1919 and down 1 million acres from last year. Corn and soybean area are pegged at 91 million acres apiece. 

Corn prices are reaching a level at which some would expect to see buying support, and if the wheat market finds a bottom, that would be helpful for grains all around, said Tomm Pfitzenmaier, the head of Summit Commodity Brokerage in Des Moines, Iowa. Still, corn-price momentum and trend indicators are still pointing lower, he said.

Chicago wheat for March delivery gained 6¢ to $4.35¼ a bushel on the Chicago Board of Trade. Kansas City futures added 4¢ to $4.31¾ a bushel. 

Corn futures for March delivery added 4¢ to $3.53¾ a bushel. 

Soybean futures for January delivery finished unchanged at $9.93 a bushel in Chicago. Soy meal gained $1.80 to $327.60 a short ton, and soy oil lost 0.1¢ to 34.03¢ a pound.

In the outside markets, WTI oil futures fell 1%, while Brent dropped 0.4%. The dollar value fell 0.1%. U.S. and overseas markets were mixed. 

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Tuesday’s Grain Market Review

DES MOINES, Iowa -- On Tuesday, the CME Group’s farm futures closed mostly lower with no bullish news to trade.

At the close, the December corn futures finished 2½¢ lower at $3.36. March futures finished 2¢ lower at $3.49¾.

January soybean futures closed 3¢ lower at $9.93; March soybean futures closed 3¢ lower at $10.04.

March wheat futures ended 1¢ higher at $4.29¼.

January soy meal futures settled $3.50 per short ton lower at $325.80. January soy oil futures settled 0.39¢ higher at 34.13¢ per pound. 

In the outside markets, the NYMEX crude oil market is 17¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 180 points higher.

Cory Bratland, Kluis Comodities chief grain strategist, says the prices are under pressure mainly due to a lack of any new fresh data to trade on.

“We still have very large burdensome supplies in the U.S. and the world. Yes, there are some potential concerns with the South American weather but way too early in the season to rally on that as we cannot kill the crop this early. Much like we cannot kill the U.S. crop in May. So with no new news, we drift – and we drift lower,” Bratland says.

Michael Rusch, regional sales director-ag/commercial for Stewart-Peterson, says the corn market is dealing with the closing of the December futures contract.

“Currently the corn price is weak, as we flirt with our December low ($3.36¼) just ahead of first notice day of the December contract. Expect investors to roll short positions to the March contract – hopefully getting traders to step out, take gains, and let market bounce,” Rusch says.

Obviously, big crop and concerns over weaker-than-expected exports are pressuring the market, Rusch says. 

“Funds are still net short in a big way. Long term, this is a bullish position because on any signs of crop trouble or increased world buying in 2018 they have a lot to liquidate,” Rusch says.
 
For the soybean market, pressure seems mainly to be due to changing weather forecasts in South America, with beneficial rains predicted in the driest areas. 

“Overall, beans are still rangebound in the big picture and finding solid support on some moving averages,” Rusch says.

In the big picture, both markets are consolidating and looking for a spark. 

“Corn has less probability of moving lower, as it is on contract lows (which, despite an ugly price, are still higher than last year’s December contract low). Beans have more room to potentially move lower as recent consolidation is midrange for the year. Seasonal trend data on corn shows strong probability to bottom in early December,” Rusch says.

On Tuesday, USDA announced that export sales of 130,000 metric tons of soybeans to China for delivery in the 2017/2018 was issued in error. The correct announcement is as follows:
 
• Export sales of 130,000 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 markets close mostly lower, with soybeans reversing to higher ground.

At the close, the December corn futures finished 3½¢ lower at $3.38¾. March futures finished 3¼¢ lower at $3.51.

January soybean futures are 2¾¢ higher at $9.96, after trading lower to start the session. March soybean futures settled 3¢ higher at $10.07.

March wheat futures finished 6½¢ lower at $4.28.

January soy meal futures finished $3.40 per short ton higher at $329.30. December soy oil futures closed 0.34¢ lower at 33.74¢ per pound. 

In the outside markets, the NYMEX crude oil market is 74¢ lower, the U.S. dollar is higher, and the Dow Jones Industrials are 26 points higher.

Jack Scoville, The PRICE Futures Group’s senior market analyst, says soybeans are holding firm on the Argentina weather that seems to remain warm and dry. 

“There are forecasts for some rain, but the market does not seem to care. Not hearing any new demand news. Corn and soybeans also noting reduced offers from producers here and to the south. No one wants to sell at these levels, but it limits upside as the stuff needs to move,” Scoville says. 

This is also the reason why the January soybeans can’t get above $10 to stay, Scoville says. 

Wheat is hurt by lower world prices with EU, Russia, and Australia all offering, he says. 

“Australia is the cheapest offer of wheat to Iraq in a tender. So, the selling shows up again,” Scoville says.

 

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