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Afternoon Market Recap for Jan. 22, 2020

Corn fights for small gains.

Midweek grain prices were mixed but mostly lower, with soybeans taking modest losses on some technical selling and wheat contracts dropping as much as 1.5% Wednesday on a round of profit-taking. Corn bucked the overall trend after a small, late rally lifted prices barely back into the green by the close.

A slow-moving storm is pushing across the central U.S., bringing another round of wintery weather for the next several days across a widespread region of the South, Midwest and Plains. The latest 72-hour cumulative precipitation map from NOAA shows heavier moisture will more likely land in parts of the southern U.S. into the Ohio River Valley. Further out, the latest 8-to-14-day forecasts favor warmer-than-average weather that should remain wetter than normal next week.

Hot technology stocks kept the Dow in the green today, ticking 42 points higher in afternoon trading to 29,237. Worries over market surpluses kicked oil prices more than 3% lower this afternoon to fall back below $57 per barrel. Gasoline and diesel followed suit with significant losses, too. Another commodity that may be worth watching is copper, which took 1% declines this afternoon. (Copper is sometimes viewed as a bellwether for global growth or contraction because it is used in so many industries.) The U.S. Dollar firmed slightly.

Be sure to tune into today through Friday for a few event highlights from our 2020 Farm Futures Business Summit and Ag Finance Boot Camp, held January 22-24 in Coralville, Iowa. Click here to learn more about this event.

Corn prices survived a choppy session and downward pressure from spillover weakness from wheat to close Wednesday with small gains. March futures firmed 1.25 cents to $3.8875, with May futures picking up 0.75 cents to $3.9425.

Corn basis bids were mostly steady to firm across the central U.S. Wednesday, moving 1 to 3 cents higher across a handful of Midwestern locations today. Farmer sales have been generally sluggish to start the new year so far.

South Korea remains an active buyer of corn this fall and winter, picking up another 5.3 million bushels from optional origins in an international tender that closed earlier today. The grain is for arrival in late April and early May.

The U.S. Energy Information Administration releases its weekly ethanol production data a day late due to Monday’s Martin Luther King Jr. holiday. The prior week’s production tally reached multi-month highs, with a daily average of 1.095 million barrels. March futures sagged 1.5% lower today, to $1.343.

Grain traveling the nation’s railways slumped again last week, with just 19,373 carloads. Three weeks into 2020 and cumulative totals are down 16% year-over-year so far, with 57,292 carloads.

Indiana farmer and Farm Futures blogger Kyle Stackhouse has been trying to raise the same number of bushels corn on his farm – using one-third fewer acres to do so. Click here to learn how he’s been working toward that goal and what he’s accomplished so far.

Preliminary volume estimates were for 241,653 contracts, falling short of Tuesday’s final count of 283,790.

Soybean prices slid slightly lower on some technical selling as additional Chinese purchases have failed to materialize so far this week, casting a bearish shadow on prices. March and May futures each fell 2.25 cents to close at $9.1375 and $9.2750, respectively.

Soybean basis bids were mostly steady across the Midwest Wednesday, inching a penny higher at an Illinois river terminal and moving 5 cents higher at an Indiana processor today.

In Brazil, a recent crop tour from Agroconsult will add additional context to the consultancy’s pre-tour soybean production estimates of 4.567 billion bushels. Positive tour observations in the country’s No. 1 production state of Mato Grosso may lead to Agroconsult revising those estimates even higher. Harvest is just beginning to kick off, with 1.8% progress as of January 16.

Algeria issued an international tender for 30,000 metric tons of soymeal from optional origins that closes Thursday. The grain is for shipment in mid-February. Egypt also purchased 60,000 MT of soyoil earlier this week.

Preliminary volume estimates were for 164,917 contracts, falling moderately below Tuesday’s final count of 205,158.

Wheat prices were tripped up by a round of technical selling and profit-taking after reaching multi-month highs earlier this week. Some positive global demand fundamentals remain in place, which may help prices remain seasonally strong moving forward. Today, March Chicago SRW futures fell 3.75 cents to $5.7775, March Kansas City HRW futures dropped 7.5 cents to $4.9250, and March MGEX spring wheat futures lost 6.75 cents to $5.5375.

Russia’s grain exports this marketing year (which began July 1), are down 16% so far from a year ago. The bulk (86%) of the total for 2019/20 is wheat exports, which have reached 801 million bushels as of January 16.

Algeria purchased approximately 14.7 million bushels of milling wheat from optional origins in an international tender that closed yesterday. The grain is for shipment in February or March.

Russia sold another 2.2 million bushels of wheat to Egypt earlier this week and has accounted for 56% of all wheat exports to Egypt since July 1.

Jordan issued another international tender to purchase 4.4 million bushels of milling wheat from optional origins, closing January 28. The grain would be for shipment in August and September. The country has struggled to finalize similar purchases this past year but has closed a handful of deals in recent weeks.

Preliminary volume estimates were for 159,924 CBOT contracts, moving ahead of Tuesday’s final count of 134,316.


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