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Afternoon Market Recap for July 23, 2019

Aid promises tweak grain prices

Corn climbs, soybeans shrink, and wheat offers mixed results

Grain prices were narrowly mixed Tuesday as traders mulled the latest updates on farmer aid amid the ongoing U.S.-China trade war. Corn and most wheat futures found small gains in the session, with soybeans retreating about 0.3% lower today.

This morning, USDA Secretary Sonny Perdue announced that qualifying farmers will receive at least $15 per acre as part of an aid package to mitigate losses from the ongoing U.S.-China trade war. Perdue said more details will be released later this week.

Weather across the central U.S. should continue to be relatively mild this week, with below-normal daytime highs across most of the region probable. Rain will be hard to find in the Midwest and Plains over the next three days, per the latest 72-hour cumulative precipitation map from NOAA, although the upper Midwest could gather a little bit more through July 26.

On Wall St., some strong corporate earnings reports and optimism over U.S.-China trade negotiations lifted stock prices, with the Dow jumping 154 points higher in afternoon trading to 27,325. Energy futures climbed 1% to 2% higher, although there are some rumblings over global demand and consumption. The U.S. Dollar firmed moderately.

Corn prices moved moderately higher Tuesday on some technical buying. Traders are cautiously optimistic over a new round of face-to-face negotiations between the U.S. and China next week. September futures gained 3.25 cents to $4.2550, with December futures rising 4.75 cents to $4.3150.

Corn basis bids were mixed Tuesday after climbing 1 to 3 cents higher at two Midwestern processors while falling 4 to 5 cents at two interior river terminals today.

USDA docked corn crop quality a point in its weekly crop progress report Monday afternoon, moving it down to 57% in good-to-excellent condition. Physiologically, 35% of the crop is silking, which is significantly behind 2018’s pace of 78% and the five-year average of 66%. And 5% of the crop has reached dough stage, versus 2018’s pace of 16% and the five-year average of 10%.

Looking at this latest data, Farm Futures yield estimates based on state-by-state ratings held steady at 168.9 bpa, though the nationwide condition reported by USDA suggests a drop of nine-tenths of a bushel to 170.2 bpa.

When it comes to buying fuel, Farm Futures senior grain market analyst says either lock in prices now or get ready to roll the dice. Find out what factors are currently in play in his latest Energy/Ethanol Outlook.

Preliminary volume estimates were for 334,382 contracts, rising 18% above Monday’s final count of 282,518.

Soybean prices took a small downward turn Tuesday as traders grow agitated over the relative lack of China purchases, which was somewhat tempered by a new round of in-person negotiations planned for next week. August and September futures each eased 2.5 cents lower to $8.8575 and $8.9150, respectively.

Soybean basis bids fell 1 to 8 cents across multiple interior river terminals but held steady across most other Midwestern locations today.

USDA held soybean quality ratings steady in its latest crop progress report Monday afternoon, with 54% of the crop in good-to-excellent condition, another 34% rated fair, and the remaining 12% rated poor or very poor – all unchanged from a week ago.

Physiologically, 40% of the soybean crop is blooming, which was a marked improvement over the prior week’s tally of 22% but still well behind 2018’s pace of 76% and the five-year average of 66%. And just 7% of the crop is setting pods, versus 2018’s pace of 41% and the five-year average of 28%.

Farm Futures estimates of yield based on the national rating was steady at 50.4 bpa, and the state-by-state reading actually improved a tenth of a bushel to 49.6 bpa, thanks to a good yield bump in Illinois.

Preliminary volume estimates were for 123,053 contracts, falling below Monday’s final count of 147,055.

Wheat prices were narrowly mixed on some light technical maneuvering Tuesday. September Chicago SRW futures were unchanged at $4.8725, September Kansas City HRW futures added 2 cents to $4.3125, and September MGEX spring wheat futures slipped 0.75 cents to $5.21.

Winter wheat harvest progressed slower than expected last week, reaching 69% per the latest USDA data, out Monday afternoon. That’s up from the prior week’s tally of 57% but below the average trade guess of 73%. Last year’s harvest was 79% by this time, as was the prior five-year average.

For spring wheat, crop quality shifted somewhat. Although the total percent of the crop rated good to excellent remained steady, at 66%, the split changed from 66/10 to 63/13. Another 20% of the crop is rated fair, with the remaining 4% rated poor, unchanged from a week ago.

Egypt purchased 11.0 million bushels of wheat in an international tender today from Romania, Russia and Ukraine. The grain is for shipment between late August and early September.

Jordan issues tenders for 4.4 million bushels of milling wheat most weeks but has failed to connect on purchases in recent months. But the country did buy 2.2 million bushels this week from optional origins, for shipment in early October.

Tunisia issued an international tender to buy 3.4 million bushels of soft milling wheat from optional origins for shipment in August or September.

Japan made offers to purchase 4.2 million bushels of food-quality wheat from the U.S. that closes Thursday. The grain would be for shipment in September.

Taiwan purchased 3.3 million bushels of wheat from the U.S. in an international tender that closed earlier today. The grain is for shipment in September or October.

Preliminary volume estimates were for 81,716 CBOT contracts, falling below Monday’s final tally of 105,183.

grainstable

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