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Afternoon Market Recap for Nov. 14, 2019

Uneven maneuvering mixes grain prices

Wheat shows the most downside, with soybeans mixed and corn slightly higher

Grains were mixed but mostly lower Thursday on a blend of trade concerns, harvest pressure and export worries. Corn finished fractionally higher, with soybeans mixed and wheat moving moderately lower in a somewhat choppy session.

Drought’s foothold in the Midwest and Plains is near nonexistent right now, according to the latest updates to the U.S. Drought Monitor, out this morning. Nationwide, 29.9% of the country is affected by drought, down more than 10 points from seasonal highs seen in mid-October. The latest seven-day cumulative precipitation map from NOAA shows only light rain or snow possible in the central U.S. through November 21.

NOAA’s Climate Prediction Center, meantime, is giving a 70% chance that El Niño conditions will remain neutral through this winter, with a 60% to 65% chance that ENSO-neutral conditions will prevail though the spring. That leaves a 25% chance that El Niño will reemerge this winter, with a near-zero chance of La Niña conditions developing.

On Wall St., sagging technology and health stocks pushed the Dow down 30 points in afternoon trading to 27,753, with lingering concerns over U.S.-China trade negotiations creating additional headwinds. Energy futures were mixed, with diesel trending moderately higher while crude oil and gasoline saw moderate cuts. The U.S. Dollar softened moderately, while safe haven gold edged 0.3% higher this afternoon.

Corn prices moved fractionally higher on some light technical selling as traders continue to ponder the exact size and production potential of this year’s embattled U.S. crop. December futures inched ahead half a penny to $3.757, with March futures up 0.75 cents to $3.8475.

Corn basis bids were mostly flat to slightly mixed Thursday, moving a penny in either direction, with the exception of an Indiana ethanol plant that firmed 8 cents higher to boost additional sales there.

Ahead of Friday morning’s weekly export report from USDA (which was delayed one day due to Monday’s Veteran’s Day holiday), analysts expect the agency to show corn sales totaling between 15.7 million and 31.5 million bushels for the week ending November 7.

Ethanol production rose for a fifth consecutive week for the period ending November, 8, according to the U.S. Energy Information Administration. Last week, ethanol plant production averaged 1.030 million barrels per day, up from 1.014 million daily barrels the prior week. With stocks trending downward, January ethanol futures were up more than 1% this afternoon, to $1.403.

Consultancy Strategie Grains slightly lowered its estimates for 2019/20 European Union corn production to just under 2.500 billion bushels.

Farmers reporting to Feedback From The Field so far in November are seeing average yields a little better than USDA estimates from last week, with corn at 169.6 bushels per acre and soybeans running at 48.9 bpa. Click here to tell us what’s happening in your area.

Preliminary volume estimates were for 283,030 contracts, down moderately from Wednesday’s final count of 391,439.

Soybean prices were mixed today, with November futures down slightly while January futures crept slightly higher. Traders were encouraged by another large sale reported to China this morning but still have lingering concerns about the overall state of U.S.-China trade negotiations. The two countries still hope to ink a partial trade deal next month but have yet to set a date or venue as they attempt to iron out some lingering disagreements. November futures dropped 2.25 cents to $9.0025, but January futures firmed 1.5 cents to $9.1675.

Soybean basis bids rose 5 to 10 cents higher at three Midwestern processors Thursday but were mostly steady elsewhere across the central U.S. today. Farmers have been mostly holding on to their harvested grain so far this fall.

Private exporters reported to USDA the sale of 4.7 million bushels of soybeans for delivery to China during the 2019/20 marketing year, which began September 1.

Analysts are expecting another big week of soybean export sales when USDA releases its next round of data Friday morning, estimating they will range between 29.4 million and 51.4 million bushels for the week ending November 7. Analysts also expect USDA to report an additional 100,0000 to 350,000 metric tons of soymeal sales, plus 5,000 to 25,000 MT of soyoil sales.

Preliminary volume estimates were for 140,543 contracts, falling moderately below Wednesday’s final count of 171,762.

Wheat prices sputtered again Thursday as focus returned to large domestic stocks and tepid expectations for export sales this past week. December Chicago SRW futures slipped 1.25 cents to $5.0775, December Kansas City HRW futures dropped 2.75 cents to $4.22, and December MGEX spring wheat futures fell 2.5 cents to $5.1250.

Ahead of Friday morning’s weekly export sales report from USDA, analysts expect the agency to show wheat sales totaling between 7.3 million and 18.4 million bushels for the week ending November 7.

Consultancy Strategie Grains is noting an uptick in the competitiveness of European Union wheat on the world market, raising its outlook for exports outside of the EU by 5.5% from last month to 1.058 million bushels this marketing year.

Ukraine’s agriculture ministry expects the country’s wheat acres to fall 3.3% from a year ago to 14.579 million acres. Ukraine still looks to continue its role as a major wheat producer and exporter, with total production of around 1.029 billion bushels this year.

The Buenos Aires Grains Exchange lowered its estimates for Argentina’s 2019/20 wheat production by 1.6% to 697.8 million bushels, citing difficulties with Fusarium in some fields.

The market’s inability to hold gains from Tuesday’s one-day round of short-covering is an indication of headwinds that wheat futures currently face, despite an outlook that’s slowly improving. Find out what factors are currently in play in the latest Wheat Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

Egypt purchased 17.1 million bushels of wheat in an international tender that closed earlier today. The grain was sourced from Ukraine and Russia, and is for shipment in January.

Preliminary volume estimates were for 117,400 CBOT contracts, sliding slightly below Wednesday’s final count of 132,802.


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