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Afternoon Market Recap for July 2, 2020

Profit-taking trims grain prices.

Corn, soybeans and wheat all land in the red Thursday

After two sessions of big gains in the grain markets, a round of profit-taking pushed corn priced more than 1.5% lower, with some wheat contracts down as much as 3% today. Soybean losses were tempered by another large sale of new crop beans headed to China, announced this morning. More hot, dry weather expected later in July could create some additional chances for upward mobility next week, depending on where rains hit – and miss.

A mostly dry weekend may lie ahead, unless you live in the Plains. NOAA’s latest 72-hour cumulative precipitation map predicts little to no additional rainfall through Sunday for large portions of Iowa, Illinois, Wisconsin, Michigan, Indiana and Ohio. The agency’s latest 8-to-14-day outlook shows seasonally warm weather probable for all of the central U.S. between July 9 and July 15, with drier-than-normal conditions emerging during this time for most areas south of I-90.

On Wall St., stocks moved higher after the U.S. government reported 4.8 million jobs were added last month, versus analyst expectations of less than 3 million. That helped the Dow jump 258 points higher in afternoon trading to 25,993. Energy futures also moved higher, with crude oil up nearly 1.5% to move back above $40 per barrel. Diesel was up more than 2% this afternoon, with gasoline up nearly 3%. The U.S. Dollar firmed slightly.

For a second straight session, commodity funds were net buyers of all major grain contracts on Thursday, including corn (+35,000), soybeans (+11,000), soymeal (+7,000), soyoil (+2,000) and CBOT wheat (+6,500).

Note: Grain markets will be closed Friday, July 3, in observation of the Independence Day holiday. Markets will resume on Monday, as will our daily morning and afternoon newsletters. See you then, and have a safe, happy holiday this weekend.

Corn prices tilted more than 1.5% lower on a round of profit-taking and technical selling after drumming up substantial gains Tuesday and Wednesday. Keep an eye on hot, dry weather in the forecasts next week to see if a weather rally can reignite gains. Today, July futures dropped 5.75 cents to $3.4250, with September futures down 7.5 cents to $3.43.

Corn basis bids were steady to mixed after ticking 2 cents higher at an Illinois river terminal while dropping 1 to 4 cents lower at three other Midwestern locations today. Farmer sales finally picked up this week after a surge in futures Tuesday and Wednesday.

Corn exports saw old crop sales totaling 14.2 million bushels last week, plus another 10.3 million bushels in new crop sales, for a total of 24.5 million bushels. That was enough to put this week’s tally in the middle of trade guesses, which ranged between 17.7 million and 35.4 million bushels. Cumulative totals for the 2019/20 marketing year are still down more than 350 million bushels versus a year ago, at 1.334 billion bushels.

Corn export shipments climbed to a marketing-year high with 56.7 million bushels, which was 21% better than the prior four-week average. Japan was the No. 1 destination, with almost 18.0 million bushels.

This morning, private exporters reported to UDSA the sale of nearly 8.0 million bushels of corn for delivery to China during the 2020/21 marketing year, which begins September 1. China, meantime, sold more than 161 million bushels of its state corn reserves at auction earlier today – selling 100% of the grain on offer.

Corn quality ratings are solid for now – but the crop could face fresh challenges as the weather heats up during pollination. Click here to share your crop reports with other growers around the country via a short survey with freshly updated questions this week. And click here to see the latest batch of farmer anecdotes and view our interactive map.

Where did 5 million corn acres go? That’s the difference between USDA’s Prospective Plantings estimates at the end of March (97 million acres) and this week’s quarterly acreage and stocks report (92 million acres). We took a closer look in the latest Midweek Markets podcast and explored the potential for a weather rally later in July – click here to listen.

Preliminary volume estimates were for 320,043 contracts, sliding significantly below Wednesday’s final count of 568,037.

Soybean prices eased slightly Thursday on spillover weakness from corn and wheat, although a large sale to China reported this morning kept losses minimized. Export inspection news was mixed, with old crop sales dropping to a marketing-year low while new-crop sales were solid. July futures dipped 1.25 cents to $8.9250, while August futures held steady at $8.9150.

Soybean basis bids were steady to soft Thursday, dropping 2 to 5 cents lower at three Midwestern processors and losing 4 cents at an Illinois river terminal today.

Soybeans saw net old crop sales of just 8.9 million bushels, plus another 30.9 million bushels of new crop sales, for a total of 39.8 million bushels. That fell in the middle of trade guesses, which ranged between 22.0 million and 58.8 million bushels. Egypt (3.0 million) bought the most old crop sales, while China (21.8 million) captured the lions’ share of new crop sales. Cumulative totals for the 2019/20 marketing year have slipped below last year’s pace after reaching 1.370 billion bushels.

Soybean export shipments were up 29% from a week ago and 6% above the prior four-week average, with 14.3 million bushels. Egypt was the No. 1 destination, with 5.4 million bushels.

Today, private exporters reported another 4.6 million bushels of soybeans for delivery to China during the 2020/21 marketing year, which begins September 1.

European Union 2019/20 soybean imports were up to 558.9 million bushels through June 28, which is mostly even with last year’s pace, according to the latest customs data. EU canola imports are up 40% year-over-year, in contrast.

Preliminary volume estimates were for 155,345 contracts, dropping to nearly half of Wednesday’s final count of 295,397.

Wheat prices dropped significantly Thursday on a round of technical selling partly spurred by spillover weakness from other grains, with yield-friendly rains forecasted for the Plains this weekend adding additional headwinds. July Chicago SRW futures dropped 8.75 cents to $4.90, July Kansas City HRW futures tumbled 14.5 cents to $4.28, and July MGEX spring wheat futures lost 8.5 cents to $4.9875.

Wheat export sales saw 15.2 million bushels last week in old crop sales, plus another 2.6 million in new crop sales, which was in the middle of trade estimates that ranged between 9.2 million and 22.0 million bushels. Taiwan was the top buyer last week, with 3.3 million bushels. Cumulative totals for the 2020/21 marketing year are now at 69 million bushels.

Wheat export shipments reached 18.6 million bushels last week. The Philippines topped all destinations, with 6.1 million bushels.

Ongoing drought challenges across the European Union earlier this year have analysts expecting an average 10% reduction in total EU wheat production this year, with an average trade guess of 4.824 billion bushels. If realized, that would represent a nearly 11% drop below last year’s production.

Meantime, EU soft wheat exports for 2019/20 were 1.228 billion bushels through June 28, which is 63% above the total cleared through June 23 a year ago.

Syria issued a new international tender to purchase 7.3 million bushels of soft wheat to be sourced from Russia. Offers are not due until July 28.

Preliminary volume estimates were for 65,418 CBOT contracts, trending moderately below Wednesday’s final count of 110,870.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Jul 350.25 342.25 342.5 -5.75
20-Sep 353.5 343 343.5 -7.5
Soybeans        
20-Jul 898 890.25 892.5 -1.25
20-Sep 895.25 888.5 890 -0.5
Soymeal                $/ton        
20-Aug 297.1 294.8 296.2 0.6
Soyoil                    cents/lb        
20-Aug 28.62 28.01 28.09 -0.32
Wheat                    $/bushel        
20-Jul 499 486.5 490 -8.75
20-Sep 499.25 488.5 492 -6.75
KC Wheat        
20-Jul 438.5 425.25 427.25 -14.5
20-Sep 443.75 432.75 434 -8.5
MPLS Wheat        
20-Jul 506   495.75 -8.5
20-Sep 518 510 510.25 -7.25
Live Cattle             cents/lb        
20-Jun 100.15 97.15 100.05 2.75
Feeder Cattle         cents/lb        
20-Sep 137.025 133.8 136.7 2.675
Lean Hogs             cents/lb        
20-Aug 49.875 48.85 49.05 -0.025
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Aug 40.63 39.46 40.42 0.6
Diesel        
20-Aug 1.2332 1.195 1.2255 0.0259
Unleaded Gasoline   $/gallon        
20-Aug 1.2545 1.2092 1.253 0.0361
Natural Gas        
20-Sep 1.789 1.724 1.787 0.066
Ethanol Futures        
20-Aug 1.29 1.27 1.295 0.04
U.S. Dollar Index        
  97.335 96.79 97.29 0.135
Gold                      $/ounce        
20-Aug 1791.7 1766.3 1782.2 9
Copper        
20-Jul 2.7445 2.715 2.7375 0.0205
Fertilizer Swaps     (as of 6/26)  
DAP Tampa-index              305.5 7
DAP-New Orleans              302.0 -1
Urea-New Orleans              220.5 4
Urea-Middle East              242.5 0
Urea-Black Sea              211.0 -3
UAN (32%) New Orleans              132.3

-11.02

 
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