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Afternoon Market Recap for May 27, 2020

Rain delays lift corn, soybeans.

Wet weather across the Midwest this week kept prices in the green Wednesday

Grain prices were mixed but mostly higher on a round of uneven technical maneuvering Wednesday. Corn and soybeans fought for small gains after soggy weather across the Midwest is keeping some planters out of the fields for now. But wheat prices trended mostly lower today on some technical selling as overseas competition remains an obstacle to drawing down large domestic stocks.

Between today and Saturday, much of the eastern Corn Belt could gather another 1” or more total rainfall, per the latest 72-hour cumulative precipitation map from NOAA. Further out, the agency’s 8-to-14-day outlook hints at much warmer, drier weather than normal between June 3 and 9.

On Wall St., enthusiasm over the slow but sure reopening of the U.S. economy continues, with the Dow up another 240 points in afternoon trading to 25,235. Volatile energy futures took a step back, in contrast, with crude oil down nearly 4% to $33 per barrel. Gasoline was also down around 4% this afternoon, with diesel dropping 1.5%. The U.S. Dollar firmed moderately.

On Tuesday, commodity funds were net buyers of corn (+3,500), soybeans (+11,000) and soyoil (+5,500) contracts but were net sellers of soymeal (-500) and CBOT wheat (-1,000).

Corn prices found moderate gains Wednesday, closing about 0.4% higher on some short-covering and technical buying after planters stopped rolling in many fields this week to wait out the latest round of rains. July futures added 1.5 cents to $3.2050, with September futures up 1.25 cents to $3.2525.

Corn basis bids were steady to firm in the central U.S. Wednesday, rising 2 to 3 cents higher at a handful of Midwestern locations today.

Corn planting progress reached 88% by Sunday, up from 80% a week ago. The tally was a bit behind analyst expectations, with an average guess of 90%. Still, progress is significantly ahead of last year’s pace of 55% and moderately ahead of the five-year average of 82%. All but 18 of the top production states – Pennsylvania (47%) and North Dakota (54%) have at least seven out of every ten acres in the ground. And 64% of the crop is now emerged, versus 43% a week ago, 28% a year ago and a five-year average of 58%.

USDA is also providing corn quality ratings starting this week, offering an initial assessment of 70% in good-to-excellent condition. Another 25% of the crop is rated fair, with the remaining 5% rated poor or very poor.

Grain traveling the nation’s railways continues to slow relative to last year’s pace, with another 21,977 carloads last week. Cumulative totals of 433,506 carloads so far this year is 6.4% below 2019’s pace.

Ukraine’s 2020 corn planting season is all but over, reaching 98% completion by May 21. The country’s total corn footprint is expected to reach 13.317 million acres this year.

South Africa’s 2020 corn production could top 613.7 million bushels this year, rising 38% above last year’s drought-stressed tally, if realized.

Zambia is not a major corn producer, but the country is enjoying a nearly 70% spike in production due to favorable weather this year. Total production could top 133 million bushels this year, leaving Zambia with a modest grain surplus.

Memorial Day reminds grain market analyst Bryce Knorr of the Indianapolis 500 in some regards. “What happens at the start of the race to harvest doesn’t assure how the market will finish come fall. But the next few days may offer clues about chances for a rally,” he says in the latest Ag Marketing IQ blog. Click here to learn more about some interesting market psychology that tends to happen right after the holiday.

Preliminary volume estimates were for 109,554 contracts, tumbling significantly below Tuesday’s final count of 215,333.

Soybean prices fought through a choppy session to close with modest gains Wednesday. Traders seem content to wait for more soybean sales to China for now, although they mostly shrugged off a large soymeal sale to the Philippines announced this morning. July futures closed up 2.25 cents to $8.4925, while August futures added 1.75 cents to $8.5050.

Soybean basis bids rose 3 cents at an Iowa river terminal Wednesday and held steady elsewhere across the Midwest today.

Private exporters reported to USDA the sale of 138,000 metric tons of soymeal for delivery to the Philippines during the 2019/20 marketing year, which ends September 30.

Soybean planting progress also gained some forward momentum this past week, moving from 53% a week ago to 65%. Analysts were expecting a swifter pace, with an average trade guess of 69%. This year’s pace is still more than double 2019’s mark of 26% and remains moderately ahead of the five-year average of 55%. Iowa leads all states, at 92%. And 35% of the crop is now emerged, moderately besting the prior five-year average of 27% and nearly quadrupling 2019’s pace of 9%.

Preliminary volume estimates were for 154,590 contracts, falling moderately below Tuesday’s final count of 188,375.

Wheat prices were mixed but mostly lower as traders continue to fret over large domestic supplies and robust overseas competition. More favorable weather across Europe is creating additional headwinds this week. July Chicago SRW futures eased 1.75 cents to $5.05, July Kansas City HRW futures added 4.75 cents to $4.52, and July MGEX spring wheat futures dropped 4.5 cents to $5.14.

Spring wheat is getting planted a bit more slowly than usual this spring. Planting progress reached 81% this week, which is slightly ahead of 2019’s pace of 80% but moderately behind the prior five-year average of 90%. Fifty-one percent of the crop is emerged nationwide, versus a five-year average of 65%.

More than two-thirds (68%) of the 2019/20 winter wheat crop is now headed. That’s a bit ahead of last year’s pace of 63% and mostly in line with the prior five-year average of 72%. USDA firmed quality ratings by two points, with 54% of the crop now in good-to-excellent condition. Another 30% of the crop is rated fair (down two points from last week), with the remaining 16% rated poor or very poor (unchanged from last week).

Ukraine’s deputy economy minister says that even though the country has bumped up against prior quota limits, it will continue to export wheat through the end of the 2019/20 marketing season.

Preliminary volume estimates were for 68,541 CBOT contracts, falling below Tuesday’s final tally of 80,036.

 

Closing Prices for Key Commodities 
  High Low Last Change
Corn                     $/bushel  cents/bu    
20-Jul 321.75 319.25 320.5 1.5
20-Sep 326.5 324 325.25 1.25
Soybeans        
20-Jul 851.25 843.5 848.5 2.25
20-Sep 853.5 846.25 850.5 0.75
Soymeal                $/ton        
20-Aug 287.1 284.3 284.4 -1.2
Soyoil                    cents/lb        
20-Aug 27.91 27.25 27.79 0.32
Wheat                    $/bushel        
20-Jul 511.75 501.25 504.5 -1.75
20-Sep 514.75 504.5 508 -2.25
KC Wheat        
20-Jul 454.25 446.25 451.75 4.75
20-Sep 460.5 452.75 458.25 4
MPLS Wheat        
20-Jul 520.5   513.25 -4.5
20-Sep 531.25 523.5 524.5 -4.25
Live Cattle             cents/lb        
20-Jun 101 99.45 100.8 1.4
Feeder Cattle         cents/lb        
20-Aug 135.925 134.025 135.7 1.275
Lean Hogs             cents/lb        
20-Jun 61.175 58.825 59.375 -0.2
Crude Oil  $/barrel *Energy prices may not represent final settlements      
20-Jun 34.32 32.18 32.59 -1.76
Diesel        
20-Jun 0.9952 0.9583 0.9679 -0.0229
Unleaded Gasoline   $/gallon        
20-Jun 1.0471 0.9808 0.9907 -0.0582
Natural Gas        
20-Jul 1.979 1.867 1.87 -0.075
Ethanol Futures        
20-Jun 1.179 1.15 1.15 -0.015
U.S. Dollar Index        
  99.36 98.715 99.08 0.174
Gold                      $/ounce        
20-Jun 1721 1693.1 1711.4 5.8
Copper        
20-May 2.4205 2.3755 2.3755 -0.063
Fertilizer Swaps     (as of 5/22)  
DAP Tampa-index              290.0 -11
DAP-New Orleans              282.2 -2
Urea-New Orleans              201.2 -25
Urea-Middle East              217.5 10
Urea-Black Sea              205.0 4
UAN (32%) New Orleans              141.7 -8.82
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