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Afternoon Market Recap for March 21, 2019

Flooding concerns seep into grain markets.

Corn and soybeans pick up steam on worries over delayed planting

With the 2019 planting season on the horizon, grain markets are beginning to factor in possible weather-related delays, moving corn futures 1% higher and soybean futures 0.5% higher in Thursday’s session. Wheat futures were mixed but also trended mostly higher today.

The latest spring flooding assessment from NOAA notes moderate or major problems for most of the Midwest between now and May. The agency’s 3-to-4-week outlook shows continued above-normal precipitation likely for a large portion of the Plains and western Corn Belt through early April.

Soaring tech stocks anchored a solid day on Wall St., with the Dow up 220 points in afternoon trading to reach 25,966. Energy futures came in mixed, with crude oil treading water, gasoline up moderately and diesel down around 0.6% this afternoon. The U.S. Dollar firmed by nearly 1%.

Corn prices climbed around 1% higher Thursday as pervasive flooding across the Plains and Midwest could lead to late-planted crops later this spring. May futures gained 4.75 cents to $3.7625, with July futures up 4.5 cents to $3.8550. Because commodity funds have a near-record net short position in corn at the moment, additional short-covering could emerge in the near future.

Corn basis bids were largely unchanged but narrowly mixed Thursday, moving just a penny higher or lower across Midwestern locations today.

A longer look at basis trends from Farm Futures senior grain market analyst Bryce Knorr notes reduced tow sizes and limited daylight running times that have restricted traffic on the lower Mississippi. Traffic continues to clear the backlog of tows on the Ohio River, though some are still waiting a couple of days to make it through the last locks before the Mississippi.

Corn exports saw 33.7 million bushels in old crop sales last week, plus another 2.4 million bushels of new crop sales, for a total of 36.1 million bushels. That was slightly ahead of the prior week’s tally of 33.3 million bushels but below trade estimates of 37.4 million bushels.

Corn export shipments were for 30.1 million bushels, with the weekly rate needed to match USDA forecasts moving up to 53.3 million bushels. Mexico leads all destinations for 2018/19 corn export commitments, accounting for 32% of the total.

Preliminary volume estimates were for 334,156 contracts, rebounding significantly from Wednesday’s final count of 173,690.

Soybean prices picked up moderate gains Thursday on some short-covering, further bolstered by spillover strength from corn. May futures added 4.5 cents to $9.1050, with July futures up 4.75 cents to $9.2425.

Soybean basis bids were steady to slightly weak Thursday, softening between 1 and 3 cents lower at two Midwestern locations today.

Soybean export sales notched 14.7 million bushels in old crop sales but saw a reduction of 2.4 million bushels in new crop sales, for a total of 12.3 million bushels. That was far below the prior week’s total of 70.4 million bushels and trade estimates of 43.2 million bushels.

Soybean export shipments also stayed ahead of the weekly rate needed to meet USDA forecasts, with 37.3 million bushels. China is the No. 1 destination for U.S. soybean export commitment for 2018/19, accounting for 27% of the total.

Preliminary volume estimates were for 74,020 contracts, down moderately from Wednesday’s final count of 114,582.

Wheat prices moved slightly mostly higher Thursday on a round of short-covering supported by spillover strength from corn. May Chicago SRW futures gained 1.75 cents to $4.6650, May Kansas City HRW futures added 2.25 cents to $4.4625, and May MGEX spring wheat futures eased 0.25 cents lower to $5.6875.

Wheat exports found 11.0 million bushels in old crop sales last week, plus another 5.1 million bushels in new crop sales, for a total of 16.1 million bushels. That moderately beat the prior week’s tally of 12.7 million bushels but fell below trade estimates of 17.9 million bushels.

Wheat export shipments were for just 13.2 million bushels, meantime, pushing the weekly rate needed to meet USDA forecasts up to 29.4 million bushels. The Philippines and Mexico occupy the top spot for U.S. wheat export commitments, with 12% of the total each.

Saudi Arabia issued an international tender to purchase 33 million bushels of feed barley, with a deadline for March 22. The grain is for arrival in May or June.

Preliminary volume estimates were for 72,410 CBOT contracts, sliding 20% below Wednesday’s final count of 90,449.

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