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Afternoon Market Recap for Dec. 4, 2019

Trade optimism pulls soybeans higher.

Wheat also trends higher Wednesday, as corn takes moderate cuts

Soybeans – ever-sensitive to the latest trade war soundbites – moved nearly 1% higher Wednesday on the latest reassurances that the U.S. and China are edging closer to a deal. Some wheat contracts were also up nearly 1% on a technical bounce today. Corn didn’t follow suit, however, taking moderate losses on a round of technical selling.

The central U.S. is set for a few more days of relatively mild, dry weather to close out the week, with cooler-than-normal weather bleeding back into the Plains and Midwest by next Tuesday or Wednesday. For the short-term, no one should expect to see more than 0.25 inches of rain or snow through next Monday, according to the latest five-day cumulative precipitation map from NOAA.

On Wall St., the Dow recovered from a three-day slump, rising 214 points in afternoon trading to 27,717, on the heels of a Bloomberg report that the U.S. and China may be nearing a much-anticipated phase-one trade deal. Crude oil jumped 4% higher this afternoon on news of declining domestic stocks and the potential for future OPEC cuts, settling back above $58 per barrel. Gasoline and diesel were also up around 2.5% each this afternoon. The U.S. Dollar softened slightly.

Corn prices suffered moderate losses amid a round of technical selling Wednesday, finishing the session nearly 1% lower. December futures fell 3.25 cents to $3.6875, with March futures down 2.75 cents to $3.7850.

Corn basis bids were mostly steady across the central U.S. Wednesday but did drop 3 cents at an Illinois ethanol plant and an Illinois river terminal today.

Ahead of Thursday morning’s USDA export sales report, analysts expect the agency to show corn sales ranging between 19.7 million and 35.4 million bushels for the week ending November 28. That would likely fall short of the prior week’s tally of 31.8 million bushels, if realized.

Ethanol production has crept higher for a tenth consecutive week, according to the latest data from the U.S. Energy Information Administration. The week ending November 29 saw a daily average of 1.060 million barrels. January ethanol futures fell about 1% today, landing at $1.371.

Farmers reporting to Feedback From The Field have seen decent corn yields, on average. Last month, respondents noted an average of 167.4 bushels per acre, which was slightly above USDA’s latest estimates of 167 bpa. Click here to read the latest round of farmer anecdotes and view our interactive map, and click this link to tell us what’s happening in your area.

Farmer sentiment is on the rise, according to the latest data from the Ag Economy Barometer from Purdue University / CME Group. November’s reading was 153, up 17 points from October and ties the highest reading in 2019. “Once again, the rise in the barometer was driven by improvements in farmers’ perceptions of both current economic conditions and their belief that conditions will improve in the future, with the biggest boost coming from improved perceptions of current conditions,” according to the report. Click here to learn more.

IEG Vantage (formerly Informa Economics) has forecast Argentina’s 2019/20 corn production at 1.811 billion bushels. IEG Vantage also forecast Brazil’s 2019/20 corn production at 4.055 billion bushels.

Preliminary volume estimates were for 188,536 contracts, sliding slightly below Tuesday’s final count of 213,760.

Soybean prices bounced moderately higher in a choppy session Wednesday, lifted by some technical buying partly spurred by U.S.-China trade optimism. January and March futures each picked up 7 cents to reach $8.78 and $8.9250, respectively.

Soybean basis bids were largely steady Wednesday, although they did slip a penny lower at an Illinois river terminal and rise 5 cents at an Indiana processor today.

Ahead of Thursday morning’s USDA export sales report, analysts expect the agency to show soybean sales ranging between 25.7 million and 47.8 million bushels for the week ending November 28, which would represent a moderate decline from the prior week’s tally of 61.1 million bushels.

Private exporters reported to USDA the sale of 20,000 metric tons of soyoil for delivery to Morocco during the 2019/20 marketing year, which began October 1.

Bloomberg reports that although plenty of doubt has been cast against a quick resolution to current U.S.-China trade disputes, the two countries still remain close to a phase-one agreement. Sources close to the matter say President Donald Trump was “speaking off the cuff” when he said yesterday that a trade deal may not be reached before the 2020 U.S. elections. Some negotiators still have hopes that a partial trade agreement will be inked before additional 15% tariffs are levied against another $160 billion in Chinese good on December 15.

IEG Vantage has forecast Argentina’s 2019/20 soybean production at 1.929 billion bushels and Brazil’s 2019/20 soybean production at 4.575 billion bushels.

Preliminary volume estimates were for 188,059 contracts, down slightly from Tuesday’s final count of 201,229.

Wheat prices tracked moderately higher Wednesday on a round of technical buying partly spurred by export hopes when USDA unloads its next round of data first thing tomorrow. December Chicago SRW futures added 4.5 cents to $5.35, December Kansas City HRW futures gained 3 cents to $4.2550, and December MGEX spring wheat futures picked up 2.25 cents to $4.9350.

Ahead of Thursday morning’s export sales report from USDA, analysts expect the agency to show wheat sales ranging between 11.0 million and 25.7 million bushels for the week ending November 28. Actuals will need to land on the high end of those estimates to best the prior week’s tally of 22.5 million bushels.

IEG Vantage is forecasting Russia’s 2019/20 wheat production at 2.793 billion bushels and Australia’s drought-stressed wheat production at just 582.5 million bushels.

Thailand purchased 2.2 million bushels of feed wheat from optional origins (with some speculation that the grain is coming from Canada or South America) in a tender that closed earlier today.

Slightly lower acres in Ukraine may negatively affect the country’s 2019/20 wheat production, with current estimates around 870.8 million bushels, as it faces warmer, drier weather than normal.

Iraq plans to import around 27.6 million bushels of wheat in 2020 but currently has around three months’ worth of grain in its strategic reserves.

Japan is looking to buy 4.4 million bushels of feed wheat and 9.2 million bushels of feed barley for arrival by mid-March. It plans to buy the grain in a simultaneous buy-and-sell auction on December 11.

China sold another 3.3 million bushels of its state reserves of wheat at auction earlier today, which was 3% of the total available for sale.

Preliminary volume estimates were for 73,602 CBOT contracts, drifting 44% below Tuesday’s final count of 130,451.


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