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Afternoon Market Recap for Jan. 24, 2020

Grain prices stumble Friday.

Corn, soybeans and wheat all land in the red in today’s session

Worries over China’s deadly (and spreading) coronavirus triggered broad selling across stocks, metals, energy and other commodities. Losses spilled into grain markets as well Friday, with corn, soybeans and wheat all tilting more than 1% lower amid a round of technical selling today.

The worst of this week’s winter weather continues to move eastbound into the weekend, with the most likelihood of additional rain and snow relegated to the northeastern U.S. through Monday, although the eastern Corn Belt will see some light moisture during this time, per the latest 72-hour cumulative precipitation map from NOAA. Further out, NOAA’s 8-to-14-day forecasts show a little less confidence in above-normal temperatures from January 31 through February 6, with wetter-than-normal conditions retreating out of the central U.S. while holding on in the upper Midwest and Northern Plains during this time.

On Wall St., worried investors tipped the Dow 278 points lower in afternoon trading to 28,881 after a second case of coronavirus was confirmed in the U.S. Word of rising global inventories also had crude oil slumping another 2.5% lower Friday afternoon to just above $54 per barrel and falling to the lowest levels since last October. Gasoline and diesel followed suit with similar losses of around 3%. The U.S. Dollar firmed moderately, as did safe-haven gold, with copper spilling another 1.7% lower this afternoon to the lowest price in nearly two months.

President Donald Trump is visiting India next month as the two countries hope to resume work on a trade deal. Ultimately, the U.S. hopes to secure a deal that will have India buy $5 to $6 billion more in U.S. farm goods, including an uptick in purchases of poultry and some high-value specialty crops.

Corn prices followed a broad range of other commodities lower Friday, losing nearly 2% despite a mostly bullish round of export data from USDA, as well as another large export sale to Guatemala, both announced this morning. March futures dropped 6.5 cents to $3.8725, with May futures down 5.75 cents to $3.9275.

Corn basis bids were steady to narrowly mixed Friday, moving as much as 2 cents higher at an Iowa ethanol plant while slipping a penny lower at an Illinois river terminal and Iowa processor today.

Private exporters reported to USDA the sale of 5.6 million bushels of corn to unknown destinations for delivery during the 2019/20 marketing year, which began September 1. Today’s sale followed two similarly sized sales announced yesterday for Guatemala and unknown destinations.

USDA reported 39.7 million bushels in total corn export sales for the week ending January 16, which was 28% better than the prior week’s tally and boomed 92% above the prior week average. Last week’s total also landed on the higher end of trade guesses, which ranged between 27.6 million and 47.2 million bushels. Japan was the No. 1 buyer, with 14.7 million bushels.

Corn export shipments were much more modest last week, at 15.4 million bushels, sliding 28% lower from a week ago and 15% below the prior four-week average. Mexico was the No. 1 destination, with 6.3 million bushels.

Ukraine’s corn exports have reached 586.6 million bushels since July 1, according to the country’s agriculture ministry.

According to Agencia Brasil, a news agency, Brazilian 2019-20 ethanol production should be a bit more than 8.7 billion gallons, against just under 8.2 billion gallons last time around. Exports, meanwhile, are slated to reach 423 million gallons. Find out some of the implications of this trend in the latest South American Crop Watch blog from James Thompson.

Algeria passed on a tender to purchase about 790,000 bushels of corn after receiving offers from the European Union and Ukraine. The grain would have been shipped in early March.

Preliminary volume estimates were for 279,152 contracts, falling substantially lower than Thursday’s final count of 410,527.

Soybean prices tilted nearly 1% lower on this week’s continued concerns about yield-boosting South American weather and the lack of China purchases. Spillover weakness from a broad range of other commodities added additional headwinds today. March and May futures each dropped 7.5 cents to close at $9.02 and $9.1575, respectively.

Soybean basis bids were mostly steady across the central U.S. but did tick a penny higher at an Ohio elevator today. Farmer sales have remained relatively slow this past week.

Soybean export sales reached 29.0 million bushels in old crop sales last week, plus another 4.4 million bushels in new crop sales for a total of 33.4 million bushels. Old crop sales climbed 59% above the prior four-week average, with total sales landing in the middle of trade guesses that ranged between 25.7 million and 47.8 million bushels. China led all buyers, with 8.3 million bushels.

Soybean export shipments slipped 3% below the prior four-week average, meantime, with 38.7 million bushels. China was the No. 1 destination, with 16.5 million bushels. Bangladesh, Mexico, Vietnam and Germany rounded out the top five.

Soymeal export sales saw a marketing-year high for 2019/20 last week, with 641,900 metric tons heading to the Philippines, Mexico, Spain, Germany and other destinations. Soyoil export sales also bested analyst expectations after reaching 55,600 MT last week.

Preliminary volume estimates were for 115,318 contracts, down from Thursday’s final count of 171,359.

Wheat prices faced the same woes as corn and soybeans Friday, moving significantly lower despite some bullish export data out this morning. Technical selling spurred by spillover weakness from a broad range of other commodities had some contracts down as much as 1.5% today. March Chicago SRW futures fell 7 cents to $5.7350, March Kansas City HRW futures dropped 6.75 cents to $4.8550, and March MGEX spring wheat futures lost 8.25 cents to $5.45.

Wheat posted a solid round of export data this morning, with USDA reporting 25.6 million bushels in old crop sales last week, plus another 1.7 million bushels in new crop sales for a total volume of 27.3 million bushels. That tally was just 7% above last week’s total but 48% higher than the prior four-week average. Analysts contributed guesses that ranged between 11.0 million and 29.4 million bushels. Bangladesh was the top buyer, with 4.1 million bushels.

Wheat export shipments are also trending 14% higher than a week ago and 27% above the prior four-week average, with 19.3 million bushels. Indonesia was the No. 1 destination, with 4.3 million bushels.

Ukraine’s 2019/20 grain exports are up 30% so far this marketing year, anchored by wheat exports of 573.2 million bushels since July 1. The country’s total grain harvest last fall was 7.1% higher year-over-year.

Preliminary volume estimates were for 93,842 CBOT contracts, sliding below Thursday’s final count of 110,712.

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