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Afternoon Market Recap for Dec. 6, 2019

Soybeans extend winning streak.

Soybean prices rise a fourth-consecutive session; corn and wheat mixed

Grain markets were mixed but mostly higher Friday, anchored by another strong showing for soybeans, which moved higher for a fourth straight session on general U.S.-China trade optimism as a key tariff deadline approaches. Corn and wheat futures were narrowly mixed on a round of uneven technical maneuvering, meantime.

Daytime highs in the Midwest and Plains should mostly track slightly above-normal through this weekend and into early next week, although sharply colder weather could arrive in the region by midweek. Most of the central U.S. could see a fairly dry week ahead, per the latest seven-day cumulative precipitation map from NOAA, although some of the eastern Corn Belt could gather up to another 1” of moisture through December 13.

Another strong jobs report (a better-than-expected 266,000 added in November) gave Wall St. a serious lift, with the Dow jumping 339 points higher in afternoon trading to a near-record 28,016. Energy futures were also up 1% or more this afternoon, with crude oil cresting back above $59 per barrel. Volatile natural gas futures bucked the trend, tumbling nearly 3.5% lower. The U.S. Dollar firmed moderately.

Commodity funds were net sellers of corn (-5,500), soymeal (-6,000) and CBOT wheat (-1,500) contracts Friday, and they were net buyers of soybeans (+5,500) and soymeal (+7,000).

Corn prices gave up most of their modest overnight gains as prices faded throughout Friday’s session but still closed slightly in the green. December futures added a penny to $3.6650, with March futures holding steady at $3.7675.

Corn basis bids were steady across the central U.S. Friday, with farmer sales remaining generally light all week.

Private exporters reported the sale of 9.7 million bushels of corn for delivery to Mexico during the 2019/20 marketing year, which began September 1.

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.

France’s 2019 corn harvest is also trending slower than normal, reaching 94% completion as of December 2, creeping up from 92% a week ago.

China’s corn production is expected to rise 1.4% this year to 10.266 billion bushels, despite a 2% reduction in acres. The country’s total grain production is up 0.9% this year.

Sources told Reuters that the Trump Administration may rely more on partial exemptions for ethanol blending requirements in an attempt to appease both farm groups and energy groups – both key political constituents.

Preliminary volume estimates were for 144,431 contracts, dipping slightly below Thursday’s final count of 157,182.

Soybean prices ticked higher for a fourth consecutive session on general optimism surrounding U.S.-China trade, which kicked off more technical buying and helped March futures close above $9 for the first time in more than a week. January futures added 5.5 cents to $8.8950, with March futures up a nickel to $9.0375.

Soybean basis bids were mostly steady across the U.S. Friday but did rise 5 cents at an Indiana processor today.

China’s soybean production is up 13% this year, topping 665 million bushels. As the world’s No. 1 soybean importer, China purchased 2.597 billion bushels through the first 10 months of 2019, primarily from Brazil and the U.S.

Meantime, China signaled it may waive import tariffs for some U.S. soybean and pork imports, based on applications from individual companies. Quantities and timing weren’t discussed, however.

And White House economic adviser Larry Kudlow told reporters Friday that there’s no “arbitrary deadline” for a partial trade agreement with China, “but the fact remains December 15 is a very important date with respect to a no-go or go-on tariffs,” adding that President Trump will make the final call on that particular decision.

Canada has turned in its smallest canola harvest in four years, landing at 820 million bushels, according to data from Statistics Canada. That’s an 8% drop from a year ago for the world’s No. 1 canola producer and exporter, as it has struggled with exports to China after it arrested a Chinese executive of Huawei Technologies Co.

Preliminary volume estimates were for 298,410 contracts, moving moderately ahead of Thursday’s final count of 201,540.

Wheat prices finished Friday narrowly mixed amid a round of uneven technical maneuvering. March Chicago SRW futures rallied late and picked up 0.75 cents to $5.2450, March Kansas City HRW futures dropped 5 cents to $4.3050, and March MGEX spring wheat futures slipped 1.75 cents to $5.1275.

Canada’s all wheat production is expected to inch 0.5% higher in 2019, at 1.189 billion bushels, according to the latest data from Statistics Canada. The country’s barley production boomed 24% year-over-year, meantime, at 477.7 million bushels.

Ukraine’s grain exports are up 31% year-over-year, thanks to a surge in wheat exports, with a running tally of 503.4 million bushels since July 1. Ukrainian corn exports reached 137.8 million bushels over the same period.

The Philippines issued an international tender to purchase 6.1 million bushels of feed wheat from optional origins, with a deadline of December 9. The grain is for shipment between February and April.

Millers from Thailand bought just over 2.0 million bushels of U.S. wheat in a tender earlier this week. The grain is for shipment in February.

Russia’s Ministry of Agriculture slightly raised its total grain harvest forecasts for 2019 to 121 million metric tons, which is 7% higher year-over-year. Russia is the world’s top wheat exporter, with an expected production of 2.756 billion bushels this year.

French consultancy FranceAgriMer estimates that 73% of the country’s soft wheat crop is in good-to-excellent condition as of December 2, falling from 75% a week ago. Eighty-three percent of the country’s 2019/20 crop is now in the ground, versus 80% last week.

China’s wheat production is expected to rise 1.6% this year to 4.909 billion bushels, according to the National Bureau of Statistics.

Preliminary volume estimates were for 70,713 CBOT contracts, firming slightly above Thursday’s final count of 64,478.


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