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Afternoon Market Recap for Feb. 19, 2020

Profit-taking clips wheat prices.

Corn also finishes Wednesday’s session in the red, with soybeans firming slightly

After notching significant gains Tuesday, a round of profit-taking ensued today that dropped some wheat contracts more than 1% lower. Corn followed suit with modest losses, while soybeans firmed by about 0.5% on general export optimism.

Not a lot of rain or snow is expected in the Midwest and Plains through the weekend, per the latest 72-hour cumulative precipitation map from NOAA. The southern third of the U.S. could see light to moderate rainfall during this time, however. Further out, the agency’s 8-to-14-day outlook calls for plenty of colder-than-normal conditions across much of the country, with some seasonally wet weather likely in portions of the upper Midwest between February 26 and March 3.

On Wall St., hot-performing tech stocks helped drive the Dow up 153 points in afternoon trading to reach 29,385. Earlier today, the Federal Reserve released its minutes from its January meeting, which signaled that the “current stance of monetary policy was appropriate,” which means interest rates are unlikely to change in the near future.

Energy futures tilted substantially higher this afternoon, with crude oil up 2.5% to clear back above $53 per barrel. Gasoline and diesel notched similar gains. The U.S. Dollar firmed moderately, as did safe-haven gold, while copper tilted nearly 0.5% lower this afternoon.

Corn prices faced moderate losses in a somewhat choppy session Wednesday, spilling about 0.7% lower on a round of technical selling and profit-taking. March futures closed down 2.5 cents to $3.8050, with May futures dropping 2.25 cents to $3.8525.

Corn basis bids largely held steady across the central U.S. Wednesday, but they did rise a penny at an Illinois river terminal and 3 cents at an Indiana processor today. Farmer sales have been generally sluggish so far this week.

USDA will report estimated crop acres for 2020 later this week at the agency’s annual Ag Outlook Forum. Ahead of that meeting, analysts are expecting U.S. corn plantings to reach 93.6 million acres this year. If average yields can hit 176.5 bushels per acre, that would mean a total production of 15.111 billion bushels and ending stocks of 2.443 billion bushels.

Iran issued an international tender to purchase nearly 7.9 million bushels of corn, which closes February 25. The grain is for shipment in March.

South Korean importers purchased a total of 5.2 million bushels of corn in separate deals earlier this week. The grain can be sourced from optional origins, but at least some is expected to come from the Black Sea region. The grain is for shipment in March or April.

Ukraine’s ProAgro consultancy estimates the country’s 2020 corn production will hold steady from a year ago, at 1.411 billion bushels. The country’s total grain production is expected to slide 3.2% lower from a year ago, however, due to lower wheat production potential.

Grain traveling the nation’s railways continue to show a slow start to 2020, with 18,325 carloads last week. Cumulative totals for this year have reached137,386 carloads, which is trending 10.3% below last year’s pace so far.

Preliminary volume estimates were for 296,420 contracts, fading significantly below Tuesday’s final count of 425,649.

Soybean prices fought for moderate gains Wednesday, moving about 0.5% higher on a round of technical buying partly fueled by export optimism as traders await news of fresh Chinese purchases. March futures gained 5 cents to $8.9725, with May futures up 3.25 cents to $9.0550.

Soybean basis bids slipped 2 cents lower at an Illinois river terminal and an Ohio elevator today, while holding steady elsewhere across the central U.S.

Ahead of USDA’s annual Ag Outlook Forum later this week, a group of analysts expect the agency to estimate 2020 soybean plantings at 84.6 million acres, with average yield potential of 50.3 bushels per acre, for a total production of 4.225 billion bushels and 2020/21 ending stocks of 519 million bushels.

“Brazilians finished paving a road that until now, was more of a mud trap that swallowed trucks on their way from soybean-producing Mato Grosso state to ports on the Tapajos River, an Amazon tributary,” according to Farm Futures blogger and farmer James Thompson. Click here to learn more about how improvements to BR-163 will affect logistics for the biggest U.S. soybean export competitor.

Ever since the phase-one trade deal with China was signed last month, farmers have been balancing optimism over the agreement with the temptation to lose hope after a surge in imports has failed to materialize so far. Duane Lowry, senior risk manager with Silver Creek Commodities, takes a closer look in our latest Ag Marketing IQ blog – click here to learn more.

Preliminary volume estimates were for 321,252 contracts, firming 18% above Tuesday’s final count of 272,570.

Wheat prices tumbled moderately lower in a choppy session Wednesday after a round of profit-taking erased a modest portion of Tuesday’s big gains. March Chicago SRW futures dipped 1.5 cents lower to $5.6525, March Kansas City HRW futures dropped 5.75 cents to $4.80, and March MGEX spring wheat futures fell 3.75 cents to $5.3575.

Ahead of USDA’s annual Ag Outlook Forum later this week, a group of analysts expect the agency to estimate 2020 wheat plantings at 44.9 million acres, with average yield potential at 49.1 bushels per acre, for a total production of 1.860 billion bushels and 2020/21 ending stocks at 829 million bushels.

Thailand purchased 1.8 million bushels of feed wheat from optional origins (but expected to be sourced from the Black Sea region). The grain is for shipment in April or May.

As expected, Jordan issued another international tender for 4.4 million bushels of milling wheat from optional origins after making no purchases in a similar tender that closed yesterday. The grain would be for shipment in September or October, depending on origin.

Japan received no offers to purchase 4.4 million bushels of feed wheat and 9.2 million bushels of feed barley in a simultaneous buy-and-sell auction that closed earlier today. Similar SBS tenders will likely be issued next week.

Ukraine’s ProAgro consultancy projects the country’s 2020 wheat production falling 7.3% from a year ago to 964 million bushels, due to lower planted acres and some unfavorable weather conditions.

Preliminary volume estimates were for 177,030 CBOT contracts, falling 38% below Tuesday’s final count of 284,557.


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