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Afternoon Market Recap for July 22, 2019

Milder weather cools grain prices

Corn, soybeans and wheat all take a tumble to start the week

There should be an abundance of great grain-growing weather this week, which was enough to create some significant headwinds for grain prices Monday. Corn fell about 2% in the session, with soybeans down 1.5% and some wheat contracts down nearly 3% today.

Cooler-than-normal temperatures across the central U.S. are expected to extend into at least early next week. There’s not a lot of rain in the forecast across the Corn Belt this week, either, per the latest seven-day cumulative precipitation map from NOAA. While some parts of Minnesota and Wisconsin could get another 1” of rain through July 29, most areas will only receive fractional rainfall totals during this time.

On Wall St., investors turn toward a big round of earnings reports this week and are starting the week on a cautiously optimistic note, with the Dow inching 4 points higher in afternoon trading to 27,157 after spending most of the morning in the red. Energy futures were mixed today. Crude oil trended more than 1% higher this afternoon amid ongoing tensions in the Middle East. Diesel also moved higher, but gasoline saw moderate cuts. The U.S. Dollar firmed slightly.

Corn prices dropped nearly 2% Monday on a round of technical selling triggered by favorable forecasts across the Corn Belt this week as late-planted corn struggles to catch up and recover from last week’s heat wave. September futures fell 8.5 cents to $4.2225, with December futures down 9 cents to $4.2675.

Corn basis bids were steady to mixed Monday, moving as much as 7 cents higher at an Illinois ethanol plant and as much as 4 cents lower at an Ohio elevator today.

It goes without saying that 2019 is far from normal. That could be an ace in the hole for farmers clinging to old crop corn, according to Farm Futures senior grain market analyst Bryce Knorr. Find out what trends are unfolding in Knorr’s latest Basis Outlook column.

Corn export inspections fell week-over-week, landing at 17.2 million bushels and falling below trade guesses that ranged between 19 million and 29 million bushels.

Mexico was the top destination, with 7.7 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to leave corn quality ratings unchanged from a week ago, with 58% of the crop rated good-to-excellent.

Brazil consultancy AgRural says the country’s second-corn harvest is trending much faster than a year ago, with a pace of 67%. Mato Grosso leads all states, with progress reaching 89% there.

European Union corn imports in July are up 81% year-over-year after reaching 47.2 million bushels, according to the European Commission.

South Korea purchased 2.2 million bushels of corn from optional origins in an international tender that closed earlier today. The grain is for arrival in late October.

Preliminary volume estimates were for 202,479 contracts, falling moderately below Friday’s final count of 293,831.

Soybean prices fell around 1.5% Monday on improving Midwestern weather forecasts and frustration over the lack of meaningful progress in ongoing U.S.-China trade negotiations. August and September futures each fell 13.5 cents to $8.88 and $8.9375, respectively.

Soybean basis bids were largely steady Monday but slipped 2 cents lower at an Ohio elevator today.

Total soybean export inspections for the week ending July 18 were lackluster, with a tally of 20.6 million bushels. That was still in the middle of trade expectations that ranged between 16 million and 27 million bushels, however. China was the No. 1 destination, with 11.7 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analyst expect the agency to show stable crop quality from the prior week, with 54% in good-to-excellent condition.

European Union soybean imports in July are up big year-over-year, trending 81% higher at 33.0 million bushels. Soymeal imports are also up 49% so far in July, with palm oil imports tumbling 45% over the same period.

China sold a small amount (around 138,000 bushels) of its state reserves of 2013 soybeans at auction Monday, which was 2.7% of the total available for sale.

The 2019 growing season has seen just about every type of weather imaginable. And last week conditions were almost as varied depending on where you farm, according to growers reporting Feedback From The Field. Click here to read the latest farmer anecdotes we have collected and view our interactive map.

Preliminary volume estimates were for 103,136 contracts, tilting 54% below Friday’s final count of 223,500.

Wheat prices took a tumble Monday, following corn and soybean lower as harvest pace is expected to roll along in the U.S. this week, and as European Union production potential is on the rise. September Chicago SRW futures fell 15.25 cents to $4.8725, September Kansas City HRW futures dropped 11.25 cents to $4.2875, and September MGEX spring wheat futures lost 8 cents to $5.2075.

Wheat export inspections rebounded from the prior week’s tally of 12.8 million bushels up to 15.9 million bushels. That total also landed in the middle of trade guesses that ranged between 12 million and 20 million bushels. Algeria was the leading destination, with 3.3 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show moderate winter wheat harvest progress, moving from 57% a week ago up to 73% as of July 21. For spring wheat, analysts expect USDA to hold quality ratings steady, with 76% of the crop in good-to-excellent condition.

European Union soft wheat exports in July are down 10% year-over-year, reaching 21.5 million bushels, according to the European Commission.

The Institute of Agricultural Market Studies has again lowered its forecast for Russia’s 2019 wheat production to 2.796 billion bushels. The group also lowered its expectations for Russia’s wheat exports this marketing year to 1.220 billion bushels.

Meantime, Russia – the world’s No. 1 wheat exporter – has harvested 20.263 million acres of wheat so far this summer, for a running tally of 1.132 billion bushels, according to the country’s agriculture ministry. Dry weather has helped speed up harvest relative to last year.

In Ukraine, consultancy APK-Inform is expecting the country’s 2019 wheat harvest to come in 12% higher than a year ago, reaching 1.010 billion bushels.

Preliminary volume estimates were for 94,768 CBOT contracts, tracking slightly below Friday’s final count of 100,386.

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