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Afternoon Market Recap for May 23, 2019

Trade worries snap corn rally.

Soybeans and wheat also down on concerns U.S.-China trade war will languish

This morning’s announcement of another $14.5 billion in direct payments left traders feeling anxious that the current U.S.-China trade war will drag on, sending corn, soybean and wheat prices spilling 1% to 2% lower today. Even so, markets continue to closely watch near-term weather forecasts, which suggest planting progress will struggle to make significant inroads through at least the end of May.

Spring rains may continue to hamper planting progress this coming week, as the latest seven-day cumulative precipitation map from NOAA shows most of the Midwest and Plains could see another 1” to 4” through May 30. The weather could also be relatively mild into early next week, with below-normal daytime highs expected in the central U.S., especially west of the Mississippi River.

Amped-up concerns over a prolonged trade war with China left Wall St. feeling bearish today, with the Dow dropping more than 400 points in afternoon trading to 25,364. Trade worries also pushed energy futures sharply lower today, with crude oil down around 6% in afternoon trading to fall back below $58 per barrel. Gasoline and diesel each saw cuts of more than 4.5%. The U.S. Dollar softened slightly.

Corn prices fell by more than 1% today on the heels of USDA’s announcement regarding a new round of farmer aid, which could influence planted acreage. July futures dropped 4.75 cents to $3.8975, with September futures down 5.25 cents to $3.9850. Prices had risen the previous eight consecutive sessions on concerns over planting delays.

Corn basis bids were steady to firm Thursday, moving 1 to 2 cents higher at two Midwestern processors and an Illinois river terminal today.

Corn export sales stumbled last week, falling 20% from the prior week to land at 17.4 million bushels in old crop sales plus another 7.2 million bushels in new crop sales for a total of 24.6 million bushels. Analysts anticipated a total ranging anywhere from 9.8 million and 41.3 million bushels.

Corn export shipments reached 34.6 million bushels last week, falling 11% week-over-week and landing 26% below the prior four-week average. Mexico and Japan were the leading destinations – each accounting for about 10.7 million bushels.

China sold 142.5 million bushels of its 2014 corn reserves at auction today, which was 90.7% of the total available for sale.

With yield potential dropping and final planting dates for full crop insurance coverage near, it’s decision time for farmers wondering what to do with their 2019 corn. Producers have three basic choices: Keep planting corn and hope for the best, switch fields to soybeans or another crop, or take prevent plant and earn a portion of their crop insurance coverage. Farm Futures senior grain market analyst Bryce Knorr walks through some key facts and figures – click here to learn more.

Preliminary volume estimates were for 494,263 contracts, sliding moderately below Wednesday’s final count of 584,766.

Soybean prices fell nearly 1% Thursday after USDA shared details regarding its latest farmer aid package. July futures dropped 7 cents to $8.2150, with August futures down 7.25 cents to $8.2825.

Soybean basis bids were steady to slightly firm Thursday, moving 2 cents higher at an Illinois and Indiana processor today.

USDA reported old crop soybean sales topping 19.7 million bushels last week, which was up 45% from the prior week and noticeably higher than the prior four-week average. Soybeans saw another 187,000 bushels of new crop sales, too. The total tally landed in the middle of trade guesses, which had a broad range between 3.7 million and 29.4 million bushels.

Soybean export shipments of 21.0 million bushels eased 7% lower week-over-week but stayed 11% ahead of the prior four-week average. China accounted for nearly half of the total, with just under 10 million bushels.

The U.S. Department of Agriculture released details Thursday morning of another round of trade aid to domestic producers in the face of continued trade disruption with China Total aid will amount to approximately $16 billion, with $14.5 billion designated for direct payments to farmers across the country. Click here to find out more about these latest plans.

Preliminary volume estimates were for 154,064 contracts, declining 20% from Wednesday’s final count of 192,022.

Wheat prices faced significant losses from a round of technical selling Thursday, with some contracts down nearly 2%. July Chicago SRW futures dipped 2.5 cents to $4.7025, July Kansas City HRW futures dropped 8.25 cents to $4.24, and July MGEX spring wheat futures fell 8.5 cents to $5.3525.

Wheat old crop sales dropped to a marketing-year low last week after reaching just 1.8 million bushels. Net new crop sales fared somewhat better, at 12.7 million bushels. Total sales of 14.5 million bushels were in the middle of trade guesses that ranged between zero and 25.7 million bushels.

Wheat export shipments of 32.4 million bushels moved 6% higher from the prior week and 24% above the prior four week-average. Indonesia, the Philippines, Taiwan, Nigeria and Japan accounted for most of that total.

Stronger domestic demand in Russia may have its 2019/20 wheat exports down by nearly 37 million bushels next year, according to the country’s deputy agriculture minister. Wheat exports this marketing year are expected to reach 1.360 billion bushels.

Preliminary volume estimates were for 90,356 CBOT contracts, down 13% from Wednesday’s final count of 103,759.


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