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Afternoon Market Recap for June 20, 2019

Weather rally reemerges

Corn, soybeans and wheat all find solid gains after stumbling overnight

Grain prices saw a round of profit-taking yesterday and were still sinking moderately lower in overnight trade. But fresh worries about late-planted crops and yield potential on the heels of the latest wet weather forecasts helped push grains forward once again Thursday. Corn tacked on more than 2%, with soybeans up around 1.25% in the session. Winter wheat prices caught moderate gains as well, due to technical buying spurred by spillover strength from other grains.

Wet weather is probable for the central third of the country this coming week, per the latest seven-day cumulative precipitation map from NOAA. Large portions of Kansas, Missouri, Iowa, Illinois and Indiana could see another 2” or more total rainfall through June 27. Temperatures are still expected to be slightly below normal for much of the Midwest and Plains at least through early next week.

Flooding has left drought’s footprint in the Midwest and Plains all but disappeared this spring. Click here to learn more about the latest updates to the U.S. Drought Monitor, out this morning.

The Federal Reserve did not move interest rates lower in its monthly meeting earlier this week, but Wall St. is betting it will do so as early as July. The news helped push the Dow up another 193 points in afternoon trading to 26,697. Energy prices surged higher this afternoon as tensions between the U.S. and Iran ratchet up. Crude oil led the way, up more than 5.5% to over $56 per barrel, while gasoline and diesel saw gains of around 3% each. The U.S. Dollar softened moderately.

Corn prices stumbled overnight but caught major headwinds Thursday from the latest round of weather forecasts, which call for ample rainfall across the Corn Belt this coming week. July futures tracked 9 cents higher to $4.50, with September futures up 8.5 cents to $4.5475.

Corn basis bids were steady to weak Thursday, falling 1 to 6 cents lower at two interior river terminals and tumbling 12 cents lower at an Ohio elevator today.

Private exporters reported to USDA the sale of 4.8 million bushels of corn for delivery to Mexico. Of the total, 43% is for delivery this marketing year, with the remainder for delivery in 2019/20.

Per the latest USDA export report, out this morning, corn export sales dropped to just 1.5 million bushels for old crop sales (falling 77% week-over-week) plus another 14.2 million in new crop sales last week, landing on the low end of analyst expectations that ranged between 11.8 million and 35.4 million bushels.

Corn export shipments saw a marketing-year low last week at 15.9 million bushels, with Mexico occupying the top spot at 10.5 million bushels.

China sold another large amount of its state reserves of corn at auction earlier today, topping 72.1 million bushels, which was 46.1% of the total available for sale.

Preliminary volume estimates were for 346,942 contracts, falling moderately below Wednesday’s final count of 481,414.

Soybean prices also firmed significantly Thursday on weather worries, picking up another 1.25% in the session. July and August futures each gained 12.25 cents to close at $9.1550 and $9.2175, respectively.

Soybean basis bids were mixed Thursday, climbing 3 cents higher at two Midwestern processors but tumbling as much as 9 cents lower at an Ohio elevator today.

Private exporters reported to USDA the sale of 6.9 million bushels of soybeans for delivery to unknown destinations. Of the total, two-thirds is for delivery this marketing year, with the remaining third for delivery in 2019/20.

Soybean export sales picked up 21.0 million bushels in old crop sales plus another 7.4 million bushels in new crop sales last week, for a total of 28.4 million bushels. The total reached the high end of trade guesses, which ranged between 7.3 million and 29.4 million bushels.

China accounted for nearly half of soybean export shipments last week, which netted a total of 27.1 million bushels, and remains the leader for all U.S. soybean export commitments this marketing year, with 29% of the total.

Preliminary volume estimates were for 216,372 contracts, shifting 37% below Wednesday’s final count of 344,101.

Wheat prices were mixed but mostly higher today after a round of technical selling on spillover strength from other grain prices. July Chicago SRW futures added4.25 cents to $5.2650, with July Kansas City HRW futures up 3.25 cents to $4.6075. MGEX spring wheat prices bucked the trend, as July futures fell 3.25 cents to $5.3825.

Last week, wheat found 6.9 million bushels of new sales for delivery this marketing year. The total fell below expectations, as analysts thought USDA would report between 7.3 million and 18.4 million bushels.

Wheat export inspections reached 15.8 million bushels last week. Indonesia was the No. 1 destination, with 3.1 million bushels.

Statistics Canada will release updated crop production information next Wednesday, and ahead of that report, a group of 18 analysts expect the country’s all-wheat acreage estimates to climb slightly from April’s tally of 25.67 million acres up to 25.7 million acres.

In a government deal, Bangladesh has agreed to import another 3.7 million bushels of Russian wheat, for arrival starting in July. The country has been one of Russia’s largest wheat customers this marketing year.

Drier weather in Russia, meantime, could negatively impact the country’s overall 2019/20 wheat exports, according to the IKAR consultancy, which lowered its projection to 1.341 billion bushels.

Japan purchased 2.3 million bushels of food-quality wheat from the U.S. in a regular tender early today.

Preliminary volume estimates were for 117,577 CBOT contracts, shrinking 38% below Wednesday’s final count of 190,466.


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