Grain markets close mostly lower Friday

Fresh sales of U.S. soybeans and corn announced Friday.

On Thursday, despite strong fresh sales of corn and soybeans and weekly export figures, the CME Group¡¯s farm markets close mostly lower.

At the close, the Dec. corn futures finished 1 lower at $4.02. March corn futures ended 1 lower at $4.07.

Nov. soybean futures settled 12 lower at $10.50. January soybean futures closed 11 lower at $10.50.

Dec. wheat futures finished 7 higher at $6.25.

Dec. soymeal futures closed $4.60 per short ton lower at $367.50. Dec. soy oil futures closed 0.18 lower at 32.99 per pound.

In the outside markets, the NYMEX crude oil market is $0.11 per barrel lower at $40.85. The U.S. dollar is lower, and the Dow Jones Industrials are 273 points (0.96%) higher.

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

  • Export sales of 128,000 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.
  • Export sales of 175,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
  • Export sales of 216,150 metric tons of soybeans received during the reporting period for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for corn and soybeans began Sept. 1.

Jack Scoville, PRICE Futures Group, says that the soybean market is missing business from China.

¡°We sold soybeans to a couple of unknown destinations, but the amounts suggest that the sales were to other countries. That seems to be the reason for the beans to be lower. Farmers still selling off the combine, so the supplies are coming in. Corn seems higher, following wheat¡¯s weather market strength. No rain in northern growing areas like Russia, Kazakhstan, eastern Ukraine, and the southwest U.S. Plus, it is dry in Western Australia, right now,¡± Scoville says.

Scoville added, ¡°Wheat is a real weather story and could stay very strong unless the weather changes almost immediately. No change to wet conditions in any of the forecasts that I can find.¡±

Separately, the USDA¡¯s Weekly Export Sales Report Thursday shows strong demand figures.

  • Corn = 655,200 metric tons vs. the trade¡¯s expectations of between 600,000 mmt and 1.2 mmt.
  • Soybeans = 2.63 million metric tons. vs. trade¡¯s expectations of 1.5 mmt to 2.2 mmt.Of that total, China bought 1.59 million metric tons.
  • Wheat = 599,700 mt.
  • Soybean meal = 152,200 mt.

Bob Linneman, Kluis Advisors, says that investors see bullish sentiment in the markets.

¡°Areas in South America got (or soon will get) some moisture. However, traders are nervous about the La Nia pattern that has developed, and the negative implications for the South American crop. Corn prices on the Dalian exchange posted a record high this week on the continuation chart. These two stories are major reasons why the bull spreads in corn have exploded higher this week. As traders compare spreads, export expectations, variable yield reports, and South American weather, they are likely considering the potential that we will see a drop in U.S. carryout,¡± Linneman told customers in a daily note.

He added, ¡°The next chart resistance for December corn is the early-January highat $4.05. A close over this level should open the door up to $4.12 and then $4.23. As long as the bull spreads keep moving higher, the trend should remain higher.¡±

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Thursday¡¯s Grain Market Review

On Thursday, the CME Group¡¯s farm markets reversehigher, after starting lower.

At the close, the Dec. corn futures finished 7 higher at $4.03. March corn futures closed 5 higher at $4.08.

Nov. soybean futures finished 6 higher at $10.62. January soybean futures ended 4 higher at $10.62.

Dec. wheat futures closed 21 higher at $6.18.

Dec. soymeal futures closed $8.50 per short ton higher at $372.10. Dec. soy oil futures settled 0.71 lower at 33.17 per pound.

In the outside markets, the NYMEX crude oil market is $0.15 per barrel lower at $40.89. The U.S. dollar is higher, and the Dow Jones Industrials are 22 points (0.06%) lower.

On Thursday, private exporters reported to the USDA export sales of 261,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.

The marketing year for soybeans began Sept. 1.

Bob Linneman, Kluis Advisors, says that demand for corn and soybeans has the bulls satisfied to run the market higher.

¡°The big corn export sale announcement on Wednesday morning gave the corn bulls just what they needed to push prices back toward the brick wall resistance of $4. Soybean traders are patiently waiting for another string of daily export sales announcements to ignite the bull camp once again. The U.S. dollar is testing the 20-day average resistance line this morning. A close over this line should open the door for the greenback to test the late-September highs,¡± Kluis told customers in a daily note.

He added, ¡°Basis prices in the U.S. are likely to improve as we head into winter. For some areas, we could see basis levels tighten toward the best levels we have seen in recent years.¡±

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Wednesday¡¯s Grain Market Review

On Wednesday, fresh demand and crop-weather worries have the CME Group¡¯s farm markets settling higher.

At the close, the Dec. corn futures finished 5 higher at $3.96. March corn futures settled 3 higher at $4.02.

Nov. soybean futures finished 12 higher at $10.56. January soybean futures ended 10 higher at $10.57.

Dec. wheat futures closed 2 higher at $5.96.

Dec. soymeal futures finished $7.60 per short ton higher at $363.60. Dec. soy oil futures are 0.26 higher at 33.88 per pound.

In the outside markets, the NYMEX crude oil market is $0.80 per barrel higher at $41.00. The U.S. dollar is lower, and the Dow Jones Industrials are 169 points lower.

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

  • Export sales of 420,000 metric tons of corn for delivery to China during the 2020/2021 marketing year.
  • Export sales of 264,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.

The marketing year for corn and soybeans began September1.

Bob Linneman, Kluis Advisors, says that investors expect soybean harvest to hit over halfway point in this afternoon¡¯s USDA report.

¡°Corn and soybean futures found support on Tuesday as prices tested the 10-day average on the charts. If this is all the deeper the bears can push prices, then we should see the bull spreads resume the uptrend as well,¡± Kluis told customers in a daily note. ¡°Many traders across all markets are trying to establish a plan for increased market volatility as the U.S. presidential election unfolds. If the markets move like they did four years ago, then will the grain markets be able to resist pressure from outside markets?¡±

He adds, ¡°With the U.S. presidential election right around the corner, it is a very good idea to have puts in place to protect unsold bushels. Those puts could also protect against improved weather conditions in South America.¡±

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Tuesday¡¯s Grain Market Review

On Tuesday, the CME Group¡¯s farm markets rebound from yesterday¡¯s sell-off.

At the close, the Dec. corn futures settled 2 1/4 higher at $3.91 1/4. March corn futures finished 2 1/2 higher at $3.99 1/2.

Nov. soybean futures settled 10 1/4 higher at $10.44. January soybean futures finished 10 1/4 higher at $10.47.

Dec. wheat futures ended 1/4 lower at $5.94.

Dec. soymeal futures closed $1.70 per short ton higher at $356.00. Dec. soy oil futures finished $0.46 cent higher at 33.62 per pound.

In the outside markets, the NYMEX crude oil market is $0.85 per barrel higher at $40.28. The U.S. dollar is higher, and the Dow Jones Industrials are 147 points lower.

On Tuesday, private exporters reported to the USDA export sales of 110,000 metric tons of corn for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for corn began Sept. 1.

Jack Scoville, PRICE Futures Group, says that the market has many reasons to be firm.

¡°It looks like the computer models have taken some of the rain out of the forecast for Brazil, plus the market still hopes for more demand from China in the beans and corn. Specs of all kinds were the best buyers, but some commercial buying was probable as end users get caught up on purchases. A lot of the end users felt like prices should be going down but that is not what happened and now they are paying up. Farmers are selling beans right off the combine but trying to store corn which makes a lot of upside for corn that much harder to think about. But, basis s firm due to demand and the tight farmer holding patterns in the corn," Scoville says.

Al Kluis, Kluis Advisors, says that investors expect soybean harvest to hit the over-halfway point in this afternoon¡¯s USDA report.

¡°On Mondayin the grain marketsmore rain over the weekend in Brazil, and with more rain in the forecasts, grain prices were hit hard,¡± Kluis told customers in a daily note. The USDA weekly crop report was delayed because of the Columbus Day Holiday, and will be released today at 3 p.m.CT.

He added, ¡°Soybean harvest will reach beyond 55% nationwide in the USDA Crop Progress report that will be released this afternoon. Harvest progress will slow this week in the northern Corn Belt and the Delta, but it will still likely reach to over 65% by next Monday. I expect corn harvest to be reported at over 50% by next Monday. It is time to get your corn hedges rolled out to the March or July 21 contracts now.¡±

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Monday¡¯s Grain Market Review

On Monday, the CME Group¡¯s soybean complexdrops sharply.

At the close, the Dec. corn futures closed 6 lower at $3.89. March corn futures ended 5 lower at $3.96.

Nov. soybean futures settled 31 lower at $10.33. January soybean futures ended 29 lower at $10.36.

Dec. wheat futures closed higher at $5.94.

Dec. soymeal futures settled $9.40 per short ton lower at $354.30. Dec. soy oil futures closed 0.85 lower at 33.16 per pound.

In the outside markets, the NYMEX crude oil market is $1.10 per barrel lower at $39.50. The U.S. dollar is higher, and the Dow Jones Industrials are 312 points higher.

Britt O¡¯Connell, cash adviser for Commodity Risk Management Group, says that today¡¯s markets are seeing follow-through selling.

¡°After a WASDE report on Friday that largely fell within the expected range both corn and soybeans test significant resistance at $4 and $10.80 respectively. After they failed to breach, we closed midrange Friday.Monday morning has brought follow-through selling in the face of a very productive week of harvest.With significant progress being made last week, (official update from USDA will be released Tuesday), yield reports seem to be average to better, with a few exceptions,¡± O¡¯Connell says.

Northern Brazil received some much needed rain fall over the weekend, with forecasts showing more in the next 10 days.

¡°Brazilian farmers are about 3% planted vs normal at 19%. With record prices in Brazil their farmers will be pushing hard to plant the acres,¡± she says.

¡°The funds hold a record-long position in soybeans, while farmers are aggressively selling beans out of the field across the scale at the best prices they have seen in a number of years. With an inverse in bean futures and attractive basis levels there is no incentive for the farmer to hold soybeans. Corn continues to play follow the leader. While ending stocks have been trimmed from our initial projects we still appear to have ample corn supplies,¡± O¡¯Connell says.

Al Kluis, Kluis Advisors, says that investors are today¡¯s USDA Crop Progress report.

¡°The USDA Crop Progress report today will show corn harvest at about 37% and soybean harvest at 55%. Last week was one of the largest harvest weeks of the year. Many of our customers are done with soybeans and getting close to 50% done with corn. Many farmers are now focused on fall tillage and getting fertilizer put on. This sets the stage for less prevent plant (and more total crop) acres in 2021,¡± Kluis told customers in a daily note.

He added, ¡°How much rain will hit (and when) in central Brazil? Last week, several cities reported record-high temperatures for October; temperatures soared to as high as 112¡ãF.The European weather model calls for 1 to 3 inches of rain later this week with 70% coverage. Another model has limited coverage and 0.25 to 0.5 inches of rain. After six weeks of hot dry conditions, a half inch of rain will not do much good.¡±

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