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Afternoon Market Recap for Nov. 13, 2019

Profit-taking robs wheat prices

Corn and soybeans track slightly lower in Wednesday’s embattled session

Wheat prices took a sharp dip lower Wednesday on a round of profit-taking after prices rose significantly higher Tuesday. Corn and soybean prices also landed in the red as spillover weakness and worries over U.S.-China trade progress sparked some technical selling today.

Believe it or not, the latest round of starkly colder weather will be drawing to a close over the next few days, with daytime highs returning to normal or even slightly above normal by early next week. The latest five-day cumulative precipitation map from NOAA shows only light rain or snow possible around the Great Lakes region through November 18, with basically no accumulation in the rest of the Corn Belt during that time.

On Wall St., rumors that the U.S. and China aren’t nearing a consensus on key trade components, including specifics over agricultural goods, kept the Dow relatively suppressed, although the index did finally shrug off the news to gain 85 points in afternoon trading to 27,776. Energy prices also shook off that news, and news that global demand could begin to slow through 2025, with crude oil, diesel and gasoline all rising 0.5% to 1% higher in afternoon trade. The U.S. Dollar firmed fractionally.

Corn prices eased slightly on some technical selling, partly spurred by stumbling wheat prices. Harvest progress continues to provide light headwinds as well. December and March futures each dropped 2.5 cents to $3.7525 and $3.84, respectively.

Corn basis bids did a bit of shuffling Wednesday, moving as much as 5 cents higher at an Iowa processor while sinking 2 cents lower at two Illinois river terminals today.

Corn harvest made moderate headway through November 10 but still landed two points behind analyst estimates, which suggested USDA would mark 68% of the harvest as complete. Total progress is still significantly behind 2018’s pace of 83% and the five-year average of 85%.

Farmers reporting to Feedback From The Field in October are seeing corn yields this past month come in very close to the latest USDA estimates, at 167 bushels per acre. Early November reports are even better, at 168.5 bpa. Click here to read the latest round of farmer anecdotes and view our interactive map.

Farmers may be lining up if they need propane to dry down corn, thanks to a perfect storm of cold weather and a wet crop. Getting fuel from storage hubs to dealers where it’s needed has again exposed a supply chain for farmers that seems to follow Murphy’s law, according to Farm Futures senior grain market analyst Bryce Knorr: If something can go wrong, it will. Find out what else Knorr has been tracking in his latest Energy/Ethanol Outlook column.

Brazil’s Conab fractionally cut its outlook for the country’s 2019/20 corn production, now at 3.873 billion bushels. Brazil’s 2019/20 corn export estimates were unchanged from Conab’s October estimates of 1.339 billion bushels. If realized, that tally will fall 12.8% below last year’s record total of 1.535 billion bushels.

Grain traveling the nation’s rails saw an uptick of 1.6% last week after reaching 21,855 carloads, although cumulative totals of 969,927 carloads in 2019 is trending 5.8% lower year-over-year.

Preliminary volume estimates were for 345,665 contracts, versus Tuesday’s final count of 437,866.

Soybean prices followed corn slightly lower on some spillover weakness from wheat, coupled with frustrations over the lack of progress for U.S.-China trade negotiations. The two countries have yet to select a date or venue to sign a partial agreement, although optimism remains that the ink could be dry on a new deal as early as December. November futures dropped 3.25 cents to $9.0250, with January futures slipping 1.75 cents to $9.1525.

Soybean basis bids were steady to firm Wednesday, moving 1 to 3 cents higher across a handful of Midwestern locations and jumping as much as 10 cents higher at a Nebraska processor today.

Private exporters reported the sale of 3.9 million bushels of soybeans for delivery to unknown destinations during the 2019/20 marketing year, which began September 1.

Harvest progress moved from 75% a week ago to 85% as of November 10. That brings this year’s harvest progress closer in line to 2018’s pace of 87% and the five-year average of 92%. Of the top 18 production states, North Carolina (54%), Wisconsin (71%) and Missouri (72%) have the most progress yet to make.

A survey of analysts suggests the National Oilseed Processors Association (NOPA) will report an October soybean crush of 166.795 million bushels when it releases its official data on Friday morning.

Brazil’s Conab is expecting a record soybean crop this year, now estimating total production of 4.441 billion bushels. Conab did not revise its forecasts for soybean exports, which remain at 2.646 billion bushels.

South Korea delayed deadlines for its series of international tenders to purchase 9.2 million bushels of GMO-free soybeans from November 11 to Nov. 18 and 22. The grain is for shipment up through 2023. If realized, that total would climb more than 9% above September’s total and weigh in as the second-best October tally on record.

Preliminary volume estimates were for 151,197 contracts, versus Tuesday’s final count of 127,596.

Wheat prices saw a significant drop in Wednesday’s session on a round of profit-taking, with prices eroding throughout the day and some contracts settling more than 3% lower. December Chicago SRW futures dropped 8 cents to $5.09, December Kansas City HRW futures tumbled 13.75 cents to $4.25, and December MGEX spring wheat futures fell 6.5 cents to $5.15.

Planting progress for winter wheat inches closer to the finish line, meantime, with 92% of the 2019/20 crop now in the ground, versus 89% a week ago. That’s slightly ahead of 2018’s pace of 88% and in line with the prior five-year average of 92%. Seventy-eight percent of the crop is emerged, slightly behind the five-year average of 81%.

Analysts expected USDA to show 57% of the crop good-to-excellent, but it docked ratings three points lower, to 54% in good-to-excellent condition. Another 33% of the crop is rated fair (up three points from last week), with the remaining 13% rated poor or very poor (unchanged from last week). That suggests a yield potential ranging between 48.3 and 50.5 bushels per acre.

China sold another 3.5 million bushels of its state reserves of wheat at auction earlier today, which was 3.2% of the total available for sale.

Preliminary volume estimates were for 89,384 CBOT contracts, versus Tuesday’s final count of 153,829.


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