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Afternoon Market Recap for May 24, 2019

Soggy forecasts boost grain prices.

Corn and wheat find big gains Friday, with soybeans up moderately

Wet weather continues to plague corn and soybean planting progress this spring, and with plenty more rain in the forecasts, grain markets handed out big gains Friday. Corn moved nearly 4% higher today, with soybean futures up around 1%. Wheat also saw some of the biggest gains today, with some contracts up more than 4% on a round of technical buying and spillover strength from corn.

The Corn Belt is facing another very wet week ahead, with another 2” to 4” expected over a large portion of the central U.S. through the end of the month, according to the latest seven-day cumulative precipitation map from NOAA. Further out, NOAA is also predicting a wetter-than-average summer, as the agency reported in its seasonal three-month outlook.

On Wall St., the Dow moved 95 points higher to 25,585 but is expected to reverse lower for a fifth consecutive week, the longest such streak since 2011. Investors are generally concerned over how the ongoing U.S.-China trade war will affect the economy. Energy futures found moderate gains after plummeting yesterday, with crude oil up 1% today. Gasoline and diesel saw more modest gains. The U.S. Dollar softened moderately.

The Federal Reserve so far has resisted White House calls for lower interest rates – but could a rate cut be on the horizon? Click here to learn more in the latest Financial Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

Grain markets are closed Monday in observance of Memorial Day. Be sure to catch back up with the next fresh batch of Farm Futures analysis starting Tuesday morning. Also due to the Memorial Day holiday, USDA will release its export inspections, crop progress and export sales reports one day later than normal next week.

Corn prices soared nearly 4% higher Friday, with July futures cresting above $4 for the first time in a year. Traders are beginning to anticipate moderately lower production this year after planting progress continues to lag significantly slower than normal. July futures gained 14.5 cents to $4.0425, with September futures picking up 14 cents to $4.1250.

July futures finished the week with total gains of around 5.5%.

Slow farmer sales kept corn basis bids steady to firm Friday, moving as much as 10 cents higher at an Ohio elevator today.

Private exporters reported to USDA the sale of 4.4 million bushels of corn for delivery to Mexico during the 2018/19 marketing year, which ends August 31.

Pressure has been mounting this week for Congress to move forward with ratifying the U.S. Mexico Canada (USMCA) trade agreement. Click here to learn more about the latest roadblocks, and the steps that need to be taken for this to happen.

An analyst poll Friday indicated Brazil’s total corn production for 2018/19 could reach a near record of 3.838 billion bushels. That would put this year’s crop 21% above a year ago, when the country struggled through drought conditions for much of the growing season.

Corn production in Ukraine is expected to decline 7.5% this year to 1.303 billion bushels, per the country’s agriculture ministry.

South Africa’s 2019 corn production is expected to decline 14% year-over-year to 421.2 million bushels, per a survey of analysts. The country’s government will release an official forecast on Tuesday.

French consultancy FranceAgriMer estimates 97% of the country’s 2019 corn crop is now in the ground by May 20, up from 88% the prior week.

Per AP reporting, the U.S. Army Corps of Engineers doesn’t expect the Mississippi River to be “fully unimpeded” until June, although may of the river’s locks and dams that were closed from flooding earlier this spring have now been reopened.

Preliminary volume estimates were for 438,971 contracts, trending 38% below Thursday’s final count of 707,101.

Soybean prices moved around 1% higher today on concerns over planting delays. July and August futures each added 8.25 cents to close at $8.2975 and $8.3650, respectively.

July futures finished higher for the second straight week after picking up another 1% this week.

Soybean basis bids boomed 17 cents higher at an Ohio elevator Friday and rose 2 to 5 cents across three other Midwestern locations today, holding steady elsewhere in the central U.S.

A poll of analysts estimates Brazil’s 2018/19 soybean harvest could top 4.269 billion bushels, moving 0.6% higher than projections from April.

If you missed yesterday’s announcement by USDA to provide an additional $16 billion in agricultural aid to offset losses incurred by the U.S.-China trade war, click here to get caught up on the latest details.

Preliminary volume estimates were for 107,665 contracts, falling 44% below Thursday’s final count of 192,235.

Wheat prices tracked significantly higher on a variety of factors that included technical buying, spillover strength from corn and ongoing unfavorable weather in major production areas that include Australia and the Black Sea region. July Chicago SRW futures gained 19.25 cents to $4.8950, July Kanas City HRW futures added 18 cents to $4.4325, and July MGEX spring wheat futures picked up 14 cents to $5.4825.

Ukraine’s wheat production this year is expected to climb 9.3% to 988 million bushels, per the country’s agriculture ministry.

Russian consultancy SovEcon expects the country’s 2019/20 wheat exports to reach 1.404 billion bushels.

French consultancy FranceAgriMer estimates that 79% of the country’s soft wheat crop is in good-to-excellent condition as of May 20, unchanged from the prior week.

Preliminary volume estimates were for 102,666 CBOT contracts, falling moderately below Thursday’s final count of 124,571.


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