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Afternoon Market Recap for Feb. 25, 2020

Grains mount modest comeback.

Corn, soybeans and wheat all tack on small gains in Tuesday’s session

Financial markets were still in disarray Tuesday amid the latest coronavirus outbreak concerns, but grain markets took the opportunity to stage a small technical bounce after suffering heavy losses Monday. Corn futures finished the session with fractional gains, with soybeans and most wheat contracts firming by 0.5% or more.

A modest amount of snow and rain is expected across the central U.S. through Friday, with the greatest amounts falling in the eastern Corn Belt, per the latest 72-hour cumulative precipitation map from NOAA. The agency’s latest 8-to-14-day outlook calls for mostly warmer-than-normal and wetter-than-normal weather from March 3 to 9.

On Wall St., fears of the spreading coronavirus and its potential effects on the global economy had the Dow on its heels for a second straight session, tumbling another 852 points lower in afternoon trading to 27,107. Energy prices also retreated again today, with crude oil down another 2.5% this afternoon to just above $50 per barrel. Gasoline and diesel also spilled 2% to 4% lower. The U.S. Dollar softened moderately.

Corn prices firmed fractionally Tuesday on a small technical bounce after dropping more than 1% yesterday. March and May futures each picked up 0.25 cents to close at $3.7250 and $3.7650, respectively.

Corn basis bids held steady across much of the central U.S. Tuesday but boosted a penny higher at a Nebraska processor and 6 cents higher at an Indiana ethanol plant while easing 1 cent lower at an Illinois river terminal today.

The U.S. Energy Information Administration’s next batch of weekly ethanol production data doesn’t come out until tomorrow morning, but ethanol prices have followed most other energy futures lower so far this week. April futures dropped another 1% today, to $1.318.

South Korea continues its flurry of recent corn purchases after closing four separate deals totaling 9.8 million bushels earlier this week. Around a third of the total could be sourced from the U.S., with the remainder coming from optional origins.

Will the recent spate of trade deals with Japan, China, Canada and Mexico jumpstart the ag economy? Click here for our exclusive in-depth look at what the latest trade agreements mean for U.S. agriculture, along with what targets we should pursue next.

This Friday is the last day to schedule an appointment with your local FSA agent to make an offer for acres to be entered into the Conservation Reserve Program (CRP). “As long as you have an appointment scheduled, your CRP offer will be able to compete in this general signup, even if the appointment is in the first week of March,” according to FSA Administrator Richard Fordyce. “This is the first opportunity for general sign up since 2016, and we want to make sure interested producers and landowners take advantage of this popular conservation program.” Click here to learn more.

On Monday, commodity funds were net sellers of corn, shedding another 15,000 contracts.

Preliminary volume estimates were for 319,348 contracts, tracking 29% below Monday’s final count of 447,808.

Soybean prices moved about 0.5% higher in a choppy session Tuesday, with bargain buyers entering the fray after prices took a double-digit tumble on Monday. March futures gained 4.75 cents to $8.79, with May futures rising 5.75 cents to $8.8825.

Soybean basis bids were steady to firm across the central U.S. Tuesday, firming 1 to 2 cents at a handful of Midwestern locations today.

Are fundamentals souring for soybean exports? Larry Shonkwiler, senior agricultural economist with Advance Trading, Inc., takes a closer look at nine factors that are currently in play, including mammoth South American crops, cheaper competitive options and more. Click here to learn more in our latest Ag Marketing IQ blog.

It will still be some time before farmers learn if they’ll receive any ARC-county payments for 2019 corn and soybeans, per market analyst Bryce Knorr. But the first county yield data released late last week by NASS suggests soybean farmers will have a better shot at aid when checks are cut this fall. Click here to learn more.

Commodity funds were net sellers of soybean (-12,000), soymeal (-3,500) and soyoil (-10,500) contracts yesterday.

Preliminary volume estimates were for 200,727 contracts, spilling moderately below Monday’s final count of 293,458.

Wheat prices recovered a portion of Monday’s steep losses after bargain buyers stepped in late in today’s session. March Chicago SRW futures added 2.75 cents to $5.39, March Kansas City HRW futures gained 4 cents to $4.5625, and March MGEX spring wheat futures picked up 2 cents to $5.15.

Winter wheat quality ratings improved slightly in the top U.S. production state of Kansas, with 35% of the crop in good-to-excellent condition as of February 24. Quality ratings also moved slightly higher this month for Oklahoma and Colorado, the No. 3 and 4 production states.

Ukraine’s 2020 winter wheat plantings eased 0.6% to 18.78 million acres, but the country is expecting another big harvest later this year, with winterkill “close to zero,” according to a senior state weather forecaster. Ukraine completed a bumper wheat harvest of 1.032 billion bushels last fall.

Jordan purchased 2.2 million bushels of hard wheat from optional origins in an international tender that closed earlier today. The grain is for shipment in early September.

Tunisia purchased 4.6 million bushels of soft milling wheat from optional origins in an international tender that closed earlier today. The grain is for shipment between March and May.

Commodity funds let go of another 15,000 CBOT contracts yesterday, marking the fourth consecutive session of net selling.

Preliminary volume estimates were for 156,566 CBOT contracts, drifting moderately below Monday’s final count of 209,262.


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