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Ag Markets Close Mixed Friday

Investors to position themselves ahead of USDA data.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets ended just as they started; mixed, ahead of next week’s USDA Supply/Demand Report.

At the close, the July corn futures finished 1 1/2¢ higher at $3.77 3/4. December futures ended 1 1/4¢ higher at $3.98.

July soybean futures settled 5¢ lower at $9.69.  November soybean futures closed 5¢ lower at $9.89.

July wheat futures finished 6 3/4¢ lower at $5.20.

July soy meal futures settled $0.60 per short ton lower at $357.80. July soy oil futures closed 0.08 lower at 30.52¢ per pound. 

In the outside markets, the NYMEX crude oil market is $0.31 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 52 points higher.

Al Kluis, Kluis Advisors, says the markets are taking a technical hit.

“Weaker-than-expected soybean export sales set the stage for the funds to be active sellers on Thursday. We have done some significant damage to the charts. The bulls will have an uphill battle unless we get some major weather problems,” Kluis stated in a daily note to customers.

Jack Scoville, The PRICE Futures Group’s Senior Market Analyst, says that it seems that investors don’t want to do much trading before the weekend’s G7 global meeting.  

“There has been fund-type selling, based on chances for better rains in the Midwest next week.  A lot of smaller customers are selling out of puts or buying calls on the break,”

The weather seems generally good and the crops seem to look good, but many areas could use a shot of rain and others,like the Iowa-Minnesota border region, have seen too much, Scoville says.  

“No matter what we should be finding a seasonal low now or soon.  Just too much growing season to go and we need to kill the crop once or twice yet, one would think,” Scoville says.

 

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets lean on wheat for strength.

For the third day in a row, investors are building in weather premiums, due to dryness in Russia and Ukraine.

The wheat market is up 1.43%, for the week, vs. a 3.26% drop for corn and a 3.38% lower soybean market.

In early trading, July corn futures are 2¢ higher at $3.80; December futures are 2¢ higher at $4.01.

July soybean futures are 3¼¢ lower at $9.91; November soybean futures are 3¢ lower at $10.10.

July wheat futures are 15¾¢ higher at $5.35.

July soy meal futures are $1.40 per short ton lower at $363.30. July soy oil futures are 0.13¢ higher at 30.78¢ per pound. 

In the outside markets, the NYMEX crude oil market is 60¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 112 points higher.

The USDA released its Weekly Export Sales Report Thursday. Corn sales beat expectations, soybeans missed and wheat sales fell within expectations.

  • Corn = 1.25 million metric tons vs. the trade’s expectations of between 700,000 and 1,100,000 metric tons
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  • Soybeans = 199,500 mt. vs. the trade’s expectations of between 200,000 and 500,000 mt.
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  • Wheat = 270,300 mt. vs. the trade’s expectations of between 150,000 and 400,000 mt.
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  • Soybean meal = 135,100 mt. vs. the trade’s expectations of between 125,000 and 250,000 metric tons

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Wednesday’s Grain Market Review

On Wednesday, the CME Group’s wheat market started and finished stronger than the corn and soybean markets.

Concerns over Russia’s wheat crop weather is underpinning the market. Also, Midwest rain expectations are pressuring corn and soybean prices.

At the close, July corn futures settled 5½¢ lower at $3.78¼; December futures closed 4¼¢ lower at $3.99.

July soybean futures finished 7¢ lower at $9.94¼; November soybean futures closed 7¢ lower at $10.13½.

July wheat futures settled 9¾¢ higher at $5.19¾.

July soy meal futures finished $2.30 per short ton lower at $365.00. July soy oil futures closed 0.14¢ lower at 30.65¢ per pound. 

In the outside markets, the NYMEX crude oil market is 61¢ lower, the U.S. dollar is lower, and the Dow Jones Industrials are 283 points higher.

Jason Ward, managing director of Northstar Commodity, says wheat continues to trade world weather.

“We view global weather as supportive with dryness still negatively affecting the Black Sea wheat areas. There is some rain in the forecast, but it is at the end of next week,” Ward says.

He adds, “Eastern Australia also has dryness concerns, which we are estimating at 30%. Another area of dryness that continues to pop up is China. Its Northern Plains are struggling for moisture and are on a similar growing schedule as U.S. corn/soy. This story could have bigger ramifications if this dryness were to continue through the end of the month.”

Ward is asking the question: Will China’s own crop production potential have an effect on its negotiating on trade? The longer it stays dry, the more valuable the U.S. relationship becomes, Ward says.
 
“There is no doubt in my mind that these trade discussions and tariffs have been a negative to U.S. agriculture. At the very least, they have stalled the upward momentum that this market had started to build in December 2017, and continued through the Argentine drought, and now through the end of the Brazilian double crop, which by all estimates is falling sharply from USDA’s May estimates,” Ward says.
 
The morning model runs for the U.S. turned cooler on day seven, as a trough comes down and potentially breaks down the ridge for a few days. “This along with ‘no word’ from the White House on China’s latest offer has more speculative length moving out of corn/soybeans. There is trapped length in both of these markets that are at losses because of how fast we fell on price over the past seven trading sessions,” Ward says.
 
July corn has wiped out 65% of its rally from January in 6 trading sessions. “Let that sink in for a minute. Now ask yourself if that seems overdone or if we have contract lows in our sights, which are at $3.62. So today’s story is wheat weather driving prices up. Corn/soy markets are floundering looking for a trade deal as bearish weather forecast for the U.S. leans on prices,” Ward says.

 

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s wheat market is off its daily highs, yet still closed higher.

At the close, July corn futures finished 3¢ higher at $3.83¾; December futures finished 2¾¢ higher at $4.04.

July soybean futures ended ½¢ lower at $10.01; November soybean futures closed 1¢ higher at $10.20.

July wheat futures settled 4¾¢ higher at $5.10.

July soy meal futures finished $1.60 per short ton lower at $367.30. July soy oil futures finished 0.14¢ lower at 30.79¢ per pound. 

In the outside markets, the NYMEX crude oil market is 71¢ higher, the U.S. dollar is lower, and the Dow Jones Industrials are 12 points lower.

Jason Roose, U.S. Commodities, says the ag markets are up due to oversold ideas.

“The grains are trading higher today, adding risk premium after multiple days of fund liquidation. However, ideal growing conditions, favorable weather, and trade concerns will give the grains resistance,” says Roose.

 

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Monday’s Grain Market Review

On Monday, the CME Group’s farm futures fight the crop-favorable rain that fell over the weekend.

At the close, July corn futures finished 10¾¢ lower at $3.80¾; December futures ended 10½¢ lower at $4.01¼¢.

July soybean futures closed 19½¢ lower at $10.01¾; November soybean futures finished 18¼¢ lower at $10.19.

July wheat futures closed 18¢ lower at $5.05¼.

July soy meal futures finished $5.10 per short ton lower at $370.30. July soy oil futures closed 0.26¢ lower at 30.93¢ per pound. 

In the outside markets, the NYMEX crude oil market is $1.15 lower, the U.S. dollar is lower, and the Dow Jones Industrials are 151 points higher.

On Monday, private exporters reported to the USDA export sales of 114,300 metric tons of soybeans for delivery to Mexico during the 2018/2019 marketing year.

The marketing year for soybeans began September 1.

Mike North, president at Commodity Risk Management Group, says weakness began in the overnight session as a seeming lack of progress was made during the trade negotiations in Beijing over the weekend.  

“Just as fast as the U.S. team could leave China on Sunday, a negative tone was expressed in all of the agricultural markets,” North says.  

North added, “The U.S. negotiation team left on Sunday without making any public statement and with no Chinese comment concerning any new agreements. While the Chinese Foreign Ministry commented that its door is still open for any future talks, it warned that any deals made under the framework agreed to at the last set of meetings would be null and void should the U.S. impose the threatened mid-June $50 billion in tariffs.”  

The weight of this news was more than the market could bear, North says.  

“Corn violated a five-month trend line. Soybeans are now resting at a trend line that began last summer. Technically, markets are in critical territory,” North says.

Al Kluis, Kluis Advisors, says the week’s grain trading is starting out on the weaker side.

“In the overnight trade, prices are lower on improved weather forecasts and disappointment on no announcements out of China,” Kluis noted in a daily lettter to customers.

He added, “The USDA Crop Progress Report out today will show corn planting right at 95% complete. The USDA crop conditions report for corn should show a good rating at 79% to 80% good to excellent. Soybean planting should be 80% or a little higher. The initial ratings should be about 75% good to excellent.”

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