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Afternoon Market Recap for Aug. 21, 2019

Grains grab a technical bounce

Corn, soybeans and wheat all fight to finish in the green Wednesday

After a relatively strong June and July, corn futures have plummeted this month, finally touching on three-month lows last week and earlier this week. Prices finally fell enough to attract some more bargain buying Wednesday, handing out gains of 0.5% to 1.0% in the session. Soybean and winter wheat futures also found moderate gains today on a round of technical buying. Spring wheat futures eased slightly.

Below-average daytime highs are heading back to the central U.S. and will likely persist through the weekend into at least early next week. Large parts of Missouri, Iowa and Minnesota can expect another 1” to 2” or more rainfall through August 26, per the latest five-day cumulative precipitation map from NOAA. Other areas in the central U.S. should come in drier than that but still receive some measurable moisture through next Monday.

On Wall St., strong earnings reports from retail giants Target, Lowe’s and others helped anchor another round of solid gains for the Dow, which trended 235 points higher this afternoon to reach 26,197. Energy futures were mixed, as crude oil dropped 0.75% to fall back under $56 per barrel, while gasoline and diesel picked up small gains this afternoon. The U.S. Dollar firmed slightly.

Meantime, President Donald Trump is again bashing the Federal Reserve on Twitter today for not lowering interest rates. But Boston Fed president Eric Rosengren said earlier this week that cutting interest rates could lead to more overleveraging of debt by both households and businesses, which would worsen the next recession. The Fed cut interest rates last month for the first time in more than a decade.

Corn prices tilted moderately higher Wednesday on some bargain buying and as some traders are optimistic for a healthy round of export data from USDA first thing tomorrow morning. September futures picked up 3 cents to $3.6250, while December futures added 1.5 cents to $3.7025.

Corn basis bids were largely steady Wednesday but did move as much as 4 cents higher at an Iowa processor and 3 cents lower at an Indiana elevator today. Farmer sales have remained relatively suppressed this week after corn futures tumbled a week ago.

Private exporters reported to USDA the sale of 12.9 million bushels of corn for delivery to Mexico during the 2019/20 marketing year, which begins September 1.

Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show corn sales totaling between 9.8 million and 39.4 million bushels for the week ending August 15.

Weekly ethanol production fell to the lowest total since mid-April, landing at a daily average of 1.023 million barrels, amid several plants announcing they were cutting production. September ethanol futures moved sharply higher today, gaining around 3.75% to reach $1.351.

In a meeting with cabinet members earlier this week, President Donald Trump suggested the possibility of rescinding some of the 31 hardship waivers granted to 31 refineries earlier in August that allow them to eschew biofuel blending requirements. Trump’s administration has received more than a little flack over the move from the agriculture industry in recent days.

After floods, drought and heat have taken turns challenging this year’s corn crop, the next question for many fields is when will a killing frost arrive? That’s just one of many things on farmers’ minds as they continue to report to Feedback From The Field. Click here to read the latest farmer anecdotes and view our interactive map.

Grain traveling the nation’s railways continues to trend sluggishly in 2019, with 19,840 carloads. This year’s cumulative volume of 727,918 carloads is down 5% from 2018’s pace.

Preliminary volume estimates were for 358,812 contracts, slipping slightly below Tuesday’s final count of 368,900.

Soybean prices firmed moderately Wednesday on a round of technical buying, prompted in part by fresh doubts about U.S. production potential for this year’s late-planted crop. September and November futures each gained 4.75 cents to close at $8.6050 and $8.73, respectively.

Soybean basis bids were mostly steady across the Midwest Wednesday but did move 3 to 7 cents higher at two interior river terminals today.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show soybean sales totaling between 5.5 million and 29.4 million bushels for the week ending August 15. Some estimates factored in as much as 7.3 million bushels in old crop sale cancellations last week.

Analysts also anticipate USDA will report 100,000 to 350,000 metric tons of soymeal sales last week, plus another 5,000 to 25,000 MT of soyoil sales.

Preliminary volume estimates were for 95,558 contracts, slipping 13% below Tuesday’s final count of 109,811.

Wheat prices finished with a round of mixed results on some uneven technical maneuvering today. Winter wheat moved higher on some bargain buying, while spring wheat slipped as harvest pressure mounts. September Chicago SRW futures gained 2.5 cents to $4.6250, September Kansas City HRW futures picked up 0.75 cents to $3.8625, and September MGEX spring wheat futures dropped 1.75 cents to $5.0225.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect the agency to show wheat sales totaling between 11.0 million and 18.4 million bushels for the week ending August 15.

Tunisia issued a tender to purchase 3.4 million bushels of milling wheat in four separate consignments for shipment between September and October.

Preliminary volume estimates were for 98,043 CBOT contracts, tilting slightly lower than Tuesday’s final count of 106,205.


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