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Image of grain bins with words Grain market week in review with Bryce Knorr and Ben Potter in white. Entire image has red tint.

Grain prices end the week mostly lower

Around round of tariffs sends corn and soybeans down; while winter wheat contracts climbed

Missed some market news this week? Here’s what Bryce Knorr and Ben Potter have been writing about.

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Corn and soybean futures opened lower across the board overnight and were never able to claw their way back above water, with fairly steady selling seen. Wheat fared a little better but was still lower following a week where most fields picked up some rain and didn’t get singed by searing temperatures. With more mild weather in the outlook, buyers have little incentive to be aggressive after a little bargain hunting last week.

After disappointing trade Monday futures got some help overnight following lower corn and soybean ratings in USDA’s weekly crop progress reports. While declines weren’t serious they came after a week of mild temperatures and wet weather, suggesting USDA may have been too optimistic in its assessment of production Aug. 12. Fallout from trade wars and weaker global economic growth remains a drag on demand, limiting excitement for now.

The dog days of August aren’t proving terribly hot in most areas, but markets are trying to avoid stagnation as summer ends. Corn and soybeans again moved higher overnight and once more they’ll be trying to hold on to those gains with little in the way of news hitting the trade. Wheat prices moved lower again, dragged by a weak tone overseas that turned the Chicago chart negative.

Crop prices held firm overnight because questions remain about the size of corn and soybean crops. Evidence so far suggests yields are holding up with two weeks of mild weather in the forecasts. Farmers won’t get hard data on production until USDA’s Sept. 12 crop report, but investors could find out more about the direction of U.S. monetary policy sooner than that. Minutes from the central bank’s July meeting showed a wide range of options, leaving Wall Street waiting for Chairman Jerome Powell’s speech Friday at the bank’s Jackson Hole, WY conference.

Mild, if not cool weather is moving into the Corn Belt following a big front that brought more rain and a taste of fall to the region. What that means for crops is still unknown as markets try to tread water and avoid a break to new lows. So far, most contracts are holding the line this week despite mixed news about demand. Financial markets are also playing a waiting game, eager to hear Federal Reserve Chairman Jerome Powell’s comments today at a speech in Jackson Hole, WY.

Crop progress

Milder temperatures and at least a little rainfall in most areas improved crop ratings last week according to farmers posting observations on Feedback From The Field. But overall yield expectations remain far below USDA’s Aug. 12 estimates as growers wait out the end of a challenging growing season. Hoping for the best, or at least okay, but fearing the worst is typical.

The latest USDA crop progress report, out Monday afternoon, marked 56% of the U.S. corn crop in good-to-excellent condition, down a point from the agency’s August 11 report. Soybean crop condition also tilted downward last week, with 53% of the crop now in good-to-excellent condition.

Exports

USDA handed out another mixed round of export inspection data in its weekly report. Soybeans saw the most bullish results after climbing moderately ahead of the prior week’s tally and besting trade estimates.

Hungry for positive export news? USDA dished out a modest helping in its latest report. Soybean exports found 1.0 million bushels in old crop sales plus another 29.1 mil-lion bushels in new crop sales last week, for a total of 30.1 million bushels. Corn exports also bested the prior week’s tally of 14.3 million bushels and trade estimates of 10.7 million bushels last week after total sales reached 16.6 million bushels. Corn export shipments were for 21.3 million bushels. Wheat exports last week saw about 21.9 million bushels in old crop sales and an-other 200,000 bushels in new crop sales for a total of 22.0 million bushels. That beat out trade estimates of 14.1 million bushels and landed higher than the prior week’s tally of 14.1 million bushels. Export shipments were for 24.3 million bushels.

Market recaps

Grain futures traded in quiet fashion through most of the overnight session until China announced new tariffs on new goods effective Sept. 1. That derailed an attempt by soybeans to rally and also sent stock index futures lower.

Grain prices were mixed but mostly lower Friday, with negative U.S.-China trade headlines dragging down corn and soybean futures in the session. But winter wheat contracts climbed nearly 1.75% today on some more technical buying, as spring wheat futures continued to drop on harvest pressure.

Outlooks

Basis outlook - Two factors sometimes help firm basis and they both were in play last week. Cheaper freight in the export pipeline lowered the cost of shipping grain, and buyers wanting to take advantage had to raise bids in some locations to convince farmers to sell after prices collapsed in the wake of USDA’s Aug. 12 reports.

Wheat outlook - The end of summer is a season fraught with risk for the wheat market. Price charts in all three futures market flashed those warning signs loud and clear last week as wheat remained mostly an afterthought following USDA’s Aug. 12 reports.

Soybean outlook - USDA had bullish news for the soybean market in its Aug. 12 supply and demand report, slashing acreage more than expected and tightening its forecast of 2019 carryout. Supplies remain burdensome nonetheless, and more questions than answers could keep a lid on gains for now.

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