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Afternoon Market Recap for April 24, 2019

Large supplies continue to pummel grain prices.

Corn, soybeans and wheat all sink lower in Wednesday’s session

Concerns over large domestic and global stockpiles prompted another round of technical selling Wednesday, pushing corn prices down around 1.5%. Soybean losses were limited thanks to an uptick in trader optimism over U.S.-China trade optimism, but wheat prices took a bigger pounding, with some contracts down as much as 2.5% today.

The latest 24-hour forecast from NCAR shows two systems moving through the central U.S. Thursday – one in the eastern Corn Belt and another in the Central Plains. Further out, the latest five-day cumulative precipitation map from NOAA shows another 1” or more is probable across large portions of the Midwest and Mid-South through April 29. Daytime highs are expected to be near-normal for the next several days.

On Wall St., another round of mostly better-than-expected earnings reports wasn’t enough to move the needle higher, with the Dow reversing 37 points lower in afternoon trading to reach 26,619. Energy futures also took moderate losses today, with crude oil down back below $66 per barrel, with diesel down nearly 1% this afternoon. The U.S. Dollar firmed moderately.

Corn prices continue to see downward pressure from large supplies and a faster planting pace this week, shedding another 1.5% in today’s session. May futures dropped 4.5 cents to $3.4675, with July futures down 4.25 cents to $3.56.

Corn basis bids continued to firm Wednesday, moving 1 to 4 cents higher across multiple Midwestern locations today. Farmer sales have remained relatively sluggish this week.

Ahead of Thursday morning’s USDA export report, analysts expect the agency to show corn sales totaling between 23.6 million and 43.3 million bushels for the week ending April 18.

USDA says it will not attempt to collect or quantify data on stored grain that was damaged in floods earlier this spring. However, agtech company Indigo Ag estimates 832 on-farm grain bins were affected in the widespread March flooding, which the company says held between 5 million and 10 million bushels of corn and soybeans.

Ethanol production moved higher for a fourth consecutive week, with an average daily production of 1.048 million barrels for the week ending April 19.

A group of analysts estimate that South Africa’s corn production for 2018/19 will fall 15% year-over-year to 389 million bushels, primarily due to drought-related yield losses. The country’s Crop Estimates Committee will provide an official production forecast Thursday.

Planting progress remains slow for now, at least according to the latest farmer comments from Feedback from the Field. “Almost zero field work done” was a popular refrain from the most recent batch of farmer observations. Click here to see what farmers in your area have been saying.

Preliminary volume estimates were for 509,317 contracts, falling fractionally below Tuesday’s final count of 511,112.

Soybean prices fell despite some optimistic U.S.-China trade news, with spillover weakness from corn and wheat prompting some technical selling. May and July futures each fell 6.75 cents to close at $8.5525 and $8.6875, respectively.

Soybean basis bids were steady to firm Wednesday, moving as much as 11 cents higher at an Iowa river terminal, with several other locations getting a 5- to 6-cent bump today.

Ahead of Thursday morning’s USDA export report, analysts expect the agency to show soybean sales totaling between 11.0 million and 27.6 million bushels for the week ending April 18. Analysts also expect USDA to report between 125,000 and 325,000 metric tons of soymeal sales last week, plus another 5,000 to 30,000 MT of soyoil sales.

U.S.-China trade negotiations resume in earnest next week, with U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and others traveling to Beijing next week. According to a White House Statement, the talks will cover a bevy of trade issues that include “intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, purchases and enforcement.” Click here to learn more about these upcoming trade talks.

Statistics Canada estimates the country’s canola acres will drop 6.6% this year to 21.3 million acres, amid pressure from an ongoing trade dispute with China.

Preliminary volume estimates were for 225,515 contracts, falling significantly below Tuesday’s final count of 364,547.

Wheat prices continue to be pummeled over export concerns and large domestic and global stocks. May Chicago SRW futures fell 6.5 cents to $4.3225, May Kansas City HRW futures tumbled 10.5 cents to $4.04, and May MGEX spring wheat futures dropped 8 cents to $5.03.

Favorable weather could mean a bumper wheat crop this year in Russia, where analysts are currently estimating a production range between 4.336 billion and 4.740 billion bushels.

Ahead of Thursday morning’s USDA export report, analysts expect the agency to show wheat sales totaling between 11.0 million and 27.6 million bushels for the week ending April 18.

Statistics Canada estimates the country’s total wheat plantings for 2019 will move 3.8% higher year-over-year, to 25.7 million acres. However, Canada’s durum wheat planting s are expected to tumble nearly 19% this year, to 5.0 million acres.

Tunisia issued an international tender to purchase 3.4 million bushels of soft wheat that closes April 25. The grain would be for shipment in late May or early June.

Preliminary volume estimates were for 112,995 CBOT contracts, down moderately from Tuesday’s final count of 152,463.

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