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Afternoon Market Recap for Jan. 15, 2019

Grains slump on U.S.-China trade.

Corn, soybeans and wheat all move lower in Tuesday’s session

Grain prices took a tumble Tuesday as unresolved U.S.-China trade concerns linger. Corn took the biggest hit, dropping nearly 2% in the session, as soybean futures fell around 1%. Wheat succumbed to some spillover weakness from other grain losses, which triggered some technical selling.

Variable weather across the central U.S. will give way to a relative “deep freeze” across much of the Midwest and Plains later this weekend, as daytime highs plummet as much as 20 degrees below normal by Sunday. The latest cumulative five-day precipitation map from NOAA shows much of the country will receive some additional rain or snow between now and January 20, although some of the Northern Plains and upper Midwest could remain dry during this time.

The federal government shutdown has reached an unprecedented 25th day, with progress to end it seen as meager at best. During the shutdown, some USDA reports (including export sales, supply and demand estimates, etc.) have been delayed, although the agency continues to release weekly grain export inspection data.

Wall St. attempted to shrug off shutdown woes, as the Dow ticked 66 points higher to reach 23,976 in afternoon trading. Energy futures also rebounded from Monday’s losses, with crude oil up 3% this afternoon to get back over $52 per barrel. Gasoline was also up around 3% today, with diesel up about 1%. The U.S. Dollar firmed moderately.

Corn prices tumbled nearly 2% Tuesday on U.S.-China trade concerns and technical selling, as March and May futures each fell 7.25 cents to $3.7125 and $3.7975, respectively.

Ukrainian consultancy APK-Inform estimates the country’s corn exports for 2018/19 could top 1.013 billion bushels, trending almost 44% higher year-over-year. The country’s total grain exports could reach a record 47 million metric tons this marketing year after record harvests last fall.

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Preliminary volume estimates were for 223,899 contracts, slipping slightly below Monday’s final count of 236,622.

Soybean prices skidded about 1% lower Tuesday as U.S.-China trade negotiations continue to move sluggishly forward. March futures dropped 10.25 cents to $8.9325, with May futures down 10.5 cents to $9.0675.

The National Oilseed Processors Association (NOPA) reported an even higher-than-expected soy crush for December, at 171.759 million bushels – the most ever for December and the third-highest monthly tally on record. Trade estimates were for a still-bullish 170.016 million bushels.

NOPA’s estimates for December ending soyoil stocks were for 1.498 billion pounds, which was fractionally above 1.484 billion pounds at the end of November. The group’s estimates for soymeal exports for December were for 826,404 metric tons, down moderately from November’s total of 901,449 MT.

Ukrainian consultancy APK-Inform estimates the country’s 2018/19 soybean exports could fall 10.6% year-over-year to 90 million bushels. The country’s canola exports are also expected to drop 1.3% year-over-year to 104.5 million bushels. These crops are relatively minor compared to the country’s powerhouse production of corn and wheat, however.

South Korea wants to purchase 5.5 million bushels of non-GMO soybeans from optional origins, for arrival in the first half of 2020. Electronic bidding will be held January 23.

Malaysia’s palm oil exports for the first half of January have topped 647,000 metric tons, surpassing early December’s output by nearly 8%.

Preliminary volume estimates were for 130,791 contracts, moving slightly ahead of Monday’s final count of 118,426.

Wheat prices retreated Tuesday on some spillover weakness from corn and soybeans, which spurred another round of technical selling. March Chicago SRW futures fell 3.25 cents to $5.11, March Kansas City HRW futures dropped 4.25 cents to $4.9475, and March MGEX spring wheat futures were down 3.5 cents to $5.61.

Ukrainian consultancy APK-Inform estimates the country’s 2018/19 wheat exports will total 569.5 million bushels, trending 9.3% lower year-over-year. The country’s total grain exports this marketing year could move 19% higher, however, due in large part to a bin-busting corn crop last fall.

Japan wants to purchase 4.1 million bushels of food-quality wheat from the U.S., Canada and Australia, issuing a regular tender that closes Thursday. Of the total,

Jordan purchased 2.2 million bushels of hard milling wheat from optional origins in attender that closed earlier Tuesday. Of the total, around 47% could be sourced from the U.S.

Preliminary volume estimates were for 68,112 CBOT contracts, moving 14% below Monday’s final count of 79,482.

grains table

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