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Afternoon Market Recap for Nov. 18, 2019

Soybeans slide lower

Improving weather in South America, plus trade worries with China fuel Monday’s price drop

Grains were mixed but mostly lower to start the week, with soybeans down around 1% on yield-boosting rains in Brazil and Argentina, plus some pessimism creeping into the ongoing U.S.-China trade negotiations. Harvest pressure applied additional headwinds, with corn also facing moderate cuts today. Winter wheat moved higher on some technical buying, meantime, as analysts expect USDA to dock crop quality for a second consecutive week when it releases its weekly crop progress report later this afternoon.

After a relatively cool October and start to November, this week should feature plenty of above-normal daytime highs across the central U.S., although some slightly cooler than normal weather should return by the weekend. The latest seven-day cumulative precipitation map from NOAA shows some wetter weather ahead, too, with the Mid-South and parts of the upper Midwest gathering another 1” or more rain or snow through November 25.

Despite some mixed signals over ongoing U.S.-China trade negotiations, Wall St. handed out modest gains today, with the Dow up 28 points in afternoon trading to 28,034 after strong performances from some real estate, utility and consumer goods stocks. Energy futures fell flat, meantime, with crude oil down more than 1% this afternoon on rising domestic stocks. Gasoline was also down around 1%, with diesel tumbling more than 2%. The U.S. Dollar softened moderately.

Corn prices were down around 1% Monday on some technical selling spurred by harvest pressure and spillover weakness from soybeans. December and March futures each fell 3.5 cents to close at $3.6775 and $3.7725, respectively.

Corn basis bids slipped a penny lower at three interior river terminals Monday and were mixed elsewhere across the central U.S. after moving as much as 4 cents higher at a Nebraska processor and 5 cents lower at an Illinois ethanol plant today.

Private exporters reported to USDA the sale of 5.2 million bushels of corn for delivery to unknown destinations during the 2019/20 marketing year, which began September 1. It was the second large corn sale and eighth large grain sale reported so far this month.

Corn export inspections were for 23.9 million bushels for the week ending November 14, besting trade estimates of 21.7 million bushels and the prior week’s tally of 22.1 million bushels. Mexico accounted for more than half of that total, with 14.4 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to show 77% of the 2019 corn crop has now been harvested as of November 17, up from 77% a week ago.

European Union corn imports are up 14% year-over-year after reaching 303 million bushels as of November 17.

Preliminary volume estimates were for 397,976 contracts, moving 48% above Friday’s final count of 268,661.

Soybean prices moved steadily lower throughout Monday’s session, finishing about 1% lower on reports that Chinese officials are pessimistic about the prospects of a trade deal because of comments from President Donald Trump saying he may not roll back tariffs amid a partial trade deal, which both sides had previously agreed to do in principle. January futures fell 8 cents to $9.1025, with March futures down 7.75 cents to $9.23.

Soybean basis bids firmed by 1 to 2 cents at several interior river terminals Monday and added 5 cents at an Indiana processor while holding steady across most other Midwestern locations today.

Soybean export inspections reached 56.3 million bushels for the week ending November 14, topping the prior week’s total of 48.9 million bushels and trade estimates of 45.9 million bushels. China was the No. 1 destination, accounting for 15.3 million bushels.

Analysts expect USDA to show 91% of this year’s soybean crop has now been harvested when it releases its weekly crop progress report later this afternoon. That’s up from 85% a week ago.

European Union soybean imports for 2019/20 topped 189 million bushels by November 17, falling mostly in line with last year’s pace. EU soymeal imports are up 15% from a year ago, meantime, with palm oil imports down 16%.

Consultancy Agrural estimates that the country’s 2019/20 soybean acres will be 1.5% higher than a year ago, with production reaching 4.435 billion bushels.

Preliminary volume estimates were for 139,994 contracts, firming 18% above Friday’s final count of 118,660.

Wheat prices were mixed but mostly higher Monday, as winter wheat contracts found a moderate bump on some technical selling partly spurred by concerns over domestic crop quality. December Chicago SRW futures gained 4.5 cents to $5.0725, with Kansas City HRW futures firming 2.25 cents to $4.1925. Spring wheat contracts bucked the overall trend, with December MGEX futures slipping half a penny lower to $5.0250.

Wheat export inspections reached 16.5 million bushels last week, trending below the prior week’s tally of 19.4 million bushels but right in line with trade estimates. The total was distributed fairly even between a handful of countries, with China leading all destinations at 2.4 million bushels.

Analysts expect USDA to report later this afternoon that 95% of the 2019/20 winter wheat crop has now been planted, up from 92% a week ago. Analysts also expect USDA to dock crop quality a point, moving it to 53% in good-to-excellent condition.

European Union soft wheat exports for 2019/20 have reached 378.5 million bushels since July 1, which is trending 56% higher year-over-year so far. EU barley exports are also up 42% from a year ago.

Ukraine’s statistics service has fractionally upgraded its 2019 wheat production estimates to 1.060 billion bushels.

Tunisia issued an international tender to purchase 3.4 million bushels of durum wheat, 3.4 million bushels of soft wheat and 2.3 million bushels of feed barley, which closes Tuesday. The grain is for shipment between December and January.

Algeria issued an international tender to purchase 1.8 million bushels of milling wheat from optional origins, with a deadline of Wednesday. They country often buys more than the nominal amount listed. The grain would be for shipment in December or January.

Preliminary volume estimates were for 144,971 CBOT contracts, trending moderately higher than Friday’s final count of 108,421.

grainstable

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