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Afternoon Market Recap for Jan. 17, 2020

Corn surges 3.5% on bargain buying.

Soybeans and wheat also find moderate gains Friday

Corn prices erased steep losses yesterday, rebounding significantly higher on a round of bargain buying that netted gains of around 3.5% by the close. Soybean futures followed corn higher with gains of around 0.5%, while technical buying lifted some wheat contracts more than 2% higher today.

Get ready for more rain and snow over the next few days, especially if you live in the Northern Plains, upper Midwest or Great Lakes region. Some snowy, icy weather was already delivered to some areas Thursday night, even briefly closing the Kansas City International Airport early this morning after a plane slid off an icy taxiway. Further out, slightly cooler and wetter than average conditions are expected for most of the central U.S. from January 24-30, per the latest 8-to-14-day outlook from NOAA.

On Wall St., the Dow continues to break into record territory, adding another 25 points this afternoon to 29,323 on general economic optimism and is expected to close the session with weekly gains of around 1.8%. Energy futures saw moderate declines, with crude oil down around 0.3% this afternoon and remaining just above $58 per barrel. Diesel was down a similar percentage, as gasoline fell nearly 0.8% this afternoon. The U.S. Dollar firmed moderately.

Want to attend the 2020 Farm Futures Business Summit next week in Coralville, Iowa? We have a promo code for that. Go here for event details and don’t forget to enter “FFFBX9” when you register.

USDA will be closed Monday, January 20, in observance of Martin Luther King Day. As such, the agency’s weekly export inspection report will come out a day later (January 21), as will its weekly export sales report (January 24). Grain markets will also be closed next Monday, but Farm Futures will have a fresh round of market analysis first thing Tuesday morning.

Corn prices surged more than 3% higher Friday as bargain buyers entered the fray after prices fell significantly over the past two sessions. March futures recovered by 13.75 cents to reach $3.8925, with May futures gaining 12.75 cents to $3.9525. For the week, March futures finished 0.8% higher after falling the previous two weeks.

Ethanol futures followed suit with significant gains of its own today, trending nearly 3% higher as March futures reached $1.364.

Corn basis bids were largely flat Friday but did inch a penny higher at an Ohio elevator and an Illinois river terminal today. Farmer sales have remained generally sluggish throughout the week.

South Korea remains an active buyer of corn on the international market in recent weeks, closing a deal for another 2.6 million bushels from optional origins earlier today. The grain is for arrival in late April.

India received several offers for its international tender to purchase 6.9 million bushels of non-GMO corn from optional origins. The tender closed January 14 but offers are still being considered by India’s state-run trading company MMTC. The grain is for shipment no later than February 10.

Preliminary volume estimates were for 462,267 contracts, moving 28% above Thursday’s final count of 361,431.

Soybean prices found earnings of around 0.5% Friday on technical buying partly spurred by spillover strength from corn. March futures and May futures each picked up 5.75 cents to close at $9.2975 and $9.43, respectively. Soyoil futures also got a nice boost of around 0.8% today, while soymeal futures finished with fractional gains.

Soybean basis bids were mostly steady but narrowly mixed Friday, sliding 2 cents lower at an Ohio elevator while firming by 4 cents at an Illinois river terminal today.

China has promised $32 billion more in U.S. agricultural purchases between 2020 and 2021, but those lofty targets are dependent on market conditions. With U.S. tariffs still in place, it may be an uphill battle for China to reach those goals. That reality is one of the factors that cooled soybean prices earlier this week.

But even with the U.S.-China trade war dragging out through all of 2019, American net farm income moved 10% higher year-over-year and reached the highest levels since 2013, according to USDA data. Market Facilitation Program (MFP) payments to the tune of $28 billion accounted for much of the increase. U.S. Secretary Agriculture Sonny Perdue said a third and final round of MFP payments will be issued “imminently” once the money is allocated through the Office of Management and Budget.

How can you turn November futures trading at $9.70 per bushel into a $9.50 cash price on your farm? Ed Usset, marketing specialist at the University of Minnesota’s Center for Farm Financial Management, notes: “The last time you had a shot at $9.50 soybeans was before the start of the trade war.” But it is possible through a three-step process, he asserts. Click here to learn more.

Preliminary volume estimates were for 162,876 contracts, down slightly from Thursday’s final count of 175,347.


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