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Afternoon Market Recap for Aug. 16, 2019

The bargain buyers are back

Technical buying lifted corn, soybean and wheat futures in Friday’s session

Although corn futures slumped more than 12% lower earlier this week, at least Friday’s prices finally moved higher after a healthy round of bargain buying. Wheat and soybeans also enjoyed a modest technical reversal today.

Much of the U.S. – minus parts of the Northern Plains – should see a general warming trend over the next several days, with daytime highs trending above normal over much of the central U.S. by early next week. Most of the Corn Belt could gather another 1” to 2” inches of additional rainfall through August 23, per the latest seven-day cumulative precipitation map from NOAA.

On Wall St., a rebound in bond yields helped quell some fears over a possible recession. That helped the Dow move 258 points higher this afternoon to reach 25,838. Energy futures also saw a modest rebound, with crude oil, gasoline and diesel all up around 0.5% to 1% this afternoon. The U.S. Dollar softened fractionally.

Corn prices saw a technical reversal Friday on some bargain buying, with prices up nearly 3% in the session. September futures finished 10.25 cents higher to $3.71, with December futures rising 9.75 cents to $3.8075.

But all told, it was a rough week for corn futures, which never fully recovered from USDA’s bullish supply and demand data on Monday. September futures finished the week down nearly 9.5%.

Corn basis bids were largely steady but slightly mixed Friday, falling as much as 5 cents at an Iowa river terminal but firming as much as 4 cents at a Nebraska processor today. Farmer sales have been relatively sluggish all week.

The 2019 growing season started out challenging, to say the least. Reports from farmers last week on Feedback From The Field suggest conditions aren’t getting any easier, as our readers have seen plenty of variability so far. Click here to read the latest farmer anecdotes and view our interactive map.

South Korea purchased 2.5 million bushels of corn in an international tender that closed earlier today. The grain can be sourced from optional origins but will likely come from South America and is for arrival in January.

France’s corn crop quality has degraded substantially since late June but held steady week-over-week, with 60% in good-to-excellent condition as of August 12, per consultancy FranceAgriMer.

Preliminary volume estimates were for 254,113 contracts, falling 25% below Thursday’s final count of 337,933.

Soybean prices slugged through a choppy session but ultimately ended nearly 1% higher Friday on a round of technical buying and short-covering. September futures rose 9.25 cents to $8.6725, with November futures up 9 cents to $8.7975. September futures nearly recaptured losses from earlier this week but still finished 0.4% lower than Monday’s open.

Soybean basis bids were mixed across Midwestern processors and interior river terminals Friday but were mostly stable elsewhere across the central U.S. today.

Private exporters reported to USDA the sale of 10.9 million bushels of soybeans for delivery to unknown destinations during the 2019/20 marketing year, which begins September 1.

Despite the Trump Administration indicating it would delay plans for 10% tariffs on an addition $300 billion in Chinese goods until later this year, China has bristled at that move, with the country’s State Council Tariff Committee saying Thursday it “has no choice but to take necessary measures to retaliate,” without specifying what exactly that may entail. Click here to read the latest struggles between the U.S. and China to make meaningful progress on trade negotiations.

Meantime, an analyst with the China National Grains and Oils Information Center suggested that the world’s top soybean importer will likely rely heavily on Brazil for its fourth quarter purchases. The country’s struggles with African swine fever – which has caused an estimated 32% decline in China’s pig herd – will remain an additional demand wildcard at least for the rest of 2019.

Preliminary volume estimates were for 109,435 contracts, easing slightly below Thursday’s final count of 115,157.

Wheat prices also climbed higher Friday on some technical buying, with some contracts up more than 1% in the session. September Chicago SRW futures picked up 1.75 cents to $4.7075, September Kansas City HRW futures gained 5 cents to $3.9475, and September MGEX spring wheat futures added 3.5 cents to $5.07.

Ukraine’s agriculture ministry reports the country has wrapped up its early grain harvest, which includes 1.036 billion bushels of wheat and another 413.4 million bushels of barley.

China sold 482,000 bushels of its state reserves of imported wheat at auction Friday, which was 6.6% of the total available for sale.

Preliminary volume estimates were for 103,802 CBOT contracts, drifting another 11% below Thursday’s final count of 117,220.

grainstable

 

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