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Afternoon Market Recap for Dec. 9, 2019

More China optimism lifts soybeans.

Corn and most wheat contracts down slightly ahead of Tuesday’s WASDE report

Soybeans rose for a fifth consecutive session after a goodwill gesture from China resulted in imports of 11 million more bushels of U.S. grain. Corn landed slightly in the red on some technical selling, with wheat mixed as traders squared positions ahead of tomorrow’s December World Agricultural Supply and Demand Estimates (WASDE) report.

Temperatures will seesaw in the Midwest and Plains this week, moving from sharply below-normal daytime highs in the middle of the week to slightly above temperatures by the weekend. Only light rain or snow is expected through December 16 across most of the central U.S., per the latest seven-day cumulative precipitation map from NOAA.

On Wall St., the Dow was on pace for its first losing day in four sessions, falling 95 points in afternoon trading to 27,919. Energy futures were narrowly mixed. Crude oil tilted fractionally lower but remains above $59 per barrel. Diesel also saw narrow cuts this afternoon, with gasoline up moderately and volatile natural gas tumbling more than 5% lower. The U.S. Dollar eased fractionally.

Corn prices moved slightly lower Monday as traders squared positions ahead of December’s WASDE report. December futures slipped 0.75 cents to $3.6575, with March futures down a penny to $3.7575.

Corn basis bids were steady to mixed Monday, moving as much as 2 cents higher at an Iowa processor but falling 7 cents lower at an Iowa river terminal today. Farmer sales were generally light to start the week.

Ahead of Tuesday morning’s WASDE report from USDA, analysts are expecting the agency to show U.S. corn stocks at 1.919 billion bushels, up slightly from November’s 1.910 billion bushels.

Corn export inspections for the week ending December 5 were for 18.9 million bushels, climbing slightly above the prior week’s tally but landing just below trade estimates of 19.7 million bushels. Mexico was the No. 1 destination, with 6.6 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show 94% of the U.S. corn crop has been harvested as of December 8, up from 89% a week ago.

European Union corn imports are up 10% year-over-year after reaching 362.2 million bushels as of December 8.

Preliminary volume estimates were for 125,763 contracts, falling a bit below Friday’s final count of 144,431.

Soybean prices grabbed moderate gains for a fifth consecutive session as optimism regarding U.S.-China trade negotiations remains relatively high. January futures climbed 7.75 cents to $8.9725, with March futures up 8 cents to $9.1175 – closing at a two-week high.

Soybean basis bids were mostly steady but firmed 1 to 5 cents across a handful of midwestern locations Monday. An Iowa river terminal bucked the overall trend, tumbling 18 cents lower and was not accepting any deliveries unless it had previously been contracted.

Ahead of Tuesday morning’s WASDE report from USDA, analysts expect the agency to show domestic soybean stocks up slightly from November’s 475 million bushels, with an average trade guess of 476 million bushels.

The U.S. soybean harvest was 96% complete last week, with USDA likely to mark progress as virtually complete and not provide additional updates in its next crop progress report later this afternoon.

As it promised, China issued a round of tariff waivers to U.S. soybeans, leading importers to purchase at least five cargoes totaling 11.0 million bushels. The waivers prevent importers from absorbing a 30% tariff on these purchases. Country officials reiterated they hope the U.S. will finalize a phase-one trade deal before additional 15% tariffs on $160 billion of Chinese goods kicks in starting December 15.

Soybean export inspections eased from a week ago, reaching 48.8 million bushels for the week ending December 5. Totals still topped the average trade guess of 44.1 million bushels, however. China was the runaway No. 1 destination, accounting for 30.5 million bushels.

European Union soybean imports for 2019/20 have reached 227.8 million bushels as of December 8, which is in line with the prior year’s pace. EU soymeal imports are up 15% over the same period, with palm oil imports down 22%.

Preliminary volume estimates were for 346,995 contracts, moving moderately above Friday’s final count of 298,319.

Wheat prices were narrowly mixed Monday amid some uneven technical maneuvering ahead of tomorrow morning’s WASDE report. March Kansas City HRW futures took the biggest hit, falling 4.25 cents to $4.2675, and Chicago SRW futures also moved lower, losing 1.75 cents to $5.2275. But MGEX spring wheat contracts firmed slightly, with March futures picking up 0.75 cents to $5.1275.

Ahead of Tuesday morning’s WASDE report from USDA, analysts expect the agency to show domestic wheat stocks moving slightly lower, from 1.014 billion bushels in November down to 1.010 billion bushels.

Wheat export inspections only landed a lackluster 11.5 million bushels for the week ending December 5, although it marked a small improvement over the prior week’s tally and was near the average trade guess of 12.9 million bushels. Mexico was the No. 1 destination, with 2.2 million bushels. Thailand and Japan rounded out the top three.

European Union soft wheat exports for 2019/20 reached 439.1 million bushels as of December 8, tracking more than 60% higher year-over-year so far. EU barley exports are also up 48% this marketing year.

Russian consultancy SovEcon estimates the country will export just 80.8 million bushels of wheat in December, making it the lowest monthly tally since June, if realized. Russia remains the world’s No. 1 wheat exporter.

Ethiopia issued an international tender to purchase 2.8 million bushels of milling wheat from optional origins with a deadline of December 18.

South Korea issued an international tender to purchase 2.2 million bushels of feed wheat from optional origins with a deadline of December 10. The grain would be for arrival by early May.

Preliminary volume estimates were for 68,478 CBOT contracts, sliding slightly below Friday’s final count of 70,713.

grainstable

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