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Afternoon Market Recap for Nov. 15, 2019

Trade optimism keeps soybeans firm

Corn and wheat slide lower on technical selling and export concerns

Grains were mixed but mostly lower Friday, with soybeans finding the most upside on some light trade optimism and another healthy round of export data out this morning. But corn and wheat continued to slump, as lackluster export totals for those grains this past week set off another round of technical selling, dragging prices down another 1% or more in the session.

Normal to slightly above-normal daytime highs will finally spill into the Midwest and Plains this weekend and early next week. This coming week, parts of the Corn Belt could see upwards of 1” of additional rainfall through November 22, particularly in parts of Missouri, Iowa and Illinois, per the latest seven-day cumulative precipitation map from NOAA.

Some fresh optimism about U.S.-China trade, courtesy of White House economic adviser Larry Kudlow, helped the Dow jump 153 points higher in afternoon trading to 27,935. That optimism spilled over into energy futures, which were mostly 1.25% to 1.75% higher this afternoon, as crude oil climbed back above $57 per barrel. The U.S. Dollar softened slightly.

Commodity funds were net buyers of soybeans (+3,500) and soymeal (+4,500) today but were net sellers of corn (-12,500), soyoil (-5,000) and CBOT wheat (-4,000).

Corn prices faded throughout Friday’s session on some technical selling prompted by another tepid round of export data from USDA this morning. Harvest pressure continues to apply additional headwinds for now, with mostly dry conditions expected across the Corn Belt through at least the middle of next week. December futures eroded 4.5 cents to $3.7125, with March futures dropping 4 cents to $3.8075.

Corn basis bids were steady across most of the central U.S. Friday but did firm by 2 cents at an Indiana ethanol plant today. Farmer sales have been relatively slow this week.

Corn export sales moved slightly higher than the prior week’s tally of 19.2 million bushels, reaching 22.9 million bushels for the week ending November 7. That was a touch behind trade estimates of 23.6 million bushels. Corn export shipments were similar, at 23.7 million bushels. Mexico far and away leads all destinations for U.S. corn export commitments in 2019/20, with 51% of the total.

Farmers reporting to Feedback From The Field so far this month have seen average yields a little better than November USDA estimates, 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.

Like the U.S., France has had some harvest struggles this fall, but consultancy FranceAgriMer reports that 85% of its crop is now harvested, up from 79% a week ago. At the same time a year ago, 99% of the crop had been harvested.

Preliminary volume estimates were for 268,809 contracts, down from Thursday’s final count of 283,030.

Soybean prices pushed slightly higher amid some technical buying spurred by solid exports this past week, plus some optimistic comments from the White House regarding U.S.-China trade negotiations. January futures added 1.5 cents to $9.1825, with March futures up 1.25 cents to $9.3075.

Soybean basis bids were largely steady across the central U.S. Friday, but they were narrowly mixed at interior river terminals and firmed 1 to 3 cents at two other eastern Corn Belt locations today.

Total soybean exports reached 46.2 million bushels last week, exceeding the average trade guess of 40.4 million bushels but falling below the prior week’s tally of 66.4 million bushels. Soybean export shipments were similar, with 46.8 million bushels. China leads all destinations for U.S. soybean export commitments in 2019/20, with 35% of the total.

October’s soy crush leapt moderately above analyst estimates of 166.795 million bushels to reach 175.397 million bushels, according to the latest monthly report from the National Oilseed Processors Association (NOPA). That’s a record effort for the month, besting the previous October high of 172.346 million bushels a year ago.

White House economic adviser Larry Kudlow indicated earlier that “we’re getting close” to finalizing a U.S.-China partial trade agreement but did not offer additional details on a date or venue of when that agreement might be signed. The two countries have remained in close contact via phone discussions in recent days, Kudlow said.

Preliminary volume estimates were for 118,670 contracts, down from Thursday’s final count of 140,425.

Wheat prices dropped 1% or more in today’s session on another round of technical selling, after a sluggish round of export data this morning sparked fresh concerns over U.S. competitiveness in the world market, although Taiwan did report a large purchase earlier today. December Chicago SRW futures dropped 5 cents to $5.0275, December Kansas City HRW futures fell 5.75 cents to $4.1650, and December MGEX spring wheat futures tumbled 9 cents to $5.0350.

Wheat sales took an unwelcome dip from the prior week’s already lackluster 13.3 million bushels down to 8.8 million bushels. That was also below trade estimates of 12.9 million bushels. Wheat export shipments fared a little better, at 16.8 million bushels. Mexico is the No. 1 destination for U.S. wheat export commitments this marketing year, with 15% of the total.

Ukraine’s grain exports are up 42% so far this marketing year, anchored by big gains in wheat exports, which have reached 463 million bushels since July, according to the country’s agriculture ministry. Ukrainian corn exports are at 228 million bushels over the same period.

Taiwan purchased more than 3.5 million bushels of milling wheat from the U.S. in a tender that closed earlier today. The grain is for shipment in January and February.

France’s 2019/20 soft wheat crop is now 72% planted, up from 67% a week ago but down from last year’s pace of 92%, according to consultancy FranceAgriMer.

Preliminary volume estimates were for 108,421 CBOT contracts, sliding slightly below Thursday’s final count of 117,396.

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