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Afternoon Market Recap for Nov. 19, 2019

Technical buying lifts grain prices

Corn, soybeans and winter wheat all trend higher in Tuesday’s session

A round of technical buying kept grain prices in the green Tuesday, with winter wheat futures earning the biggest gains on the heels of the latest USDA crop progress report, which lowered crop quality for a second straight week. Corn and soybeans found modest gains, with spring wheat futures down slightly today.

A midweek warmup is currently underway, with plenty of above-normal daytime highs expected across the central U.S. through Thursday, with cooler weather likely to prevail later this weekend into early next week. Some wet weather is also possible across the Corn Belt through Friday, per the latest 72-hour cumulative precipitation map from NOAA, with an inch or more total rainfall possible for some areas during this time.

On Wall St., disappointing earnings from Home Depot (often seen as a key metric for retail trends) and Boeing pushed the Dow down 87 points in afternoon trading to 27,948. Energy futures continued to tilt lower today on oversupply concerns and trade war anxiety, as crude oil tumbled 3% lower to back below $56 per barrel. Gasoline and diesel also saw moderate cuts this afternoon. The U.S. Dollar firmed slightly.

Corn prices found modest gains Tuesday in an uneven session, as technical buying kept prices in the green today. December futures added 2.25 cents to $3.70, with March futures up 3.5 cents to $3.8075.

Corn basis bids were mostly steady to weak across the central U.S. Tuesday, falling 2 to 5 cents at a handful of Midwestern locations. An Iowa ethanol plant bucked the overall trend after firming 3 cents today.

Corn harvest progress is now at 76% as of November 17, up from 66% a week ago. That is just below analyst estimates of 77% and still moderately behind 2018’s pace of 89% and the five-year average of 92%, however.

Private exporters reported to USDA the sale of 7.5 million bushels of corn for delivery to unknown destinations during the 2019/20 marketing year, which began September 1. That follows another large sale of corn reported yesterday, also headed for unknown destinations.

The Midwest Center for Investigative Reporting notes that during a 10-minute delay in USDA’s release of its monthly World Agricultural Supply and Demand Estimates (WASDE) report on November 8 due to IT maintenance, traders bought and sold 31,000 contracts, which added up to big gains – or losses – in the grain markets. “Those 10 minutes are really valuable 10 minutes because the market is actively trading,” says Scott Irwin, professor of agricultural and consumer economics at the University of Illinois. “Millions of dollars, tens of millions of dollars are at stake.”

South Korea purchased 2.4 million bushels of corn, likely sourced from Ukraine, in a deal that closed earlier today. The grain is for shipment in late December or early January. And another South Korean group also announced it has purchased another 2.6 million bushels of corn from optional origins, for delivery in March.

Argentina has planted 44% of an expected 15.8 million corn acres for its 2019/20 season, according to the Buenos Aires Grains Exchange. USDA estimates that the country will export 1.319 billion bushels of corn between this October and next September.

Preliminary volume estimates were for 413,801 contracts, up slightly from Monday’s final count of 392,743.

Soybean prices shrugged off worries over U.S.-China trade negotiations, firming slightly on some technical buying. January futures picked up 1.25 cents to $9.1150, while March futures firmed 1.5 cents to $9.2450. Soymeal and soyoil futures also finished higher today.

Soybean basis bids were steady to mixed Tuesday, firming 2 to 5 cents at two Midwestern processors but slipping a penny lower at two other locations today. Farmer sales have been relatively slow so far this week.

Soybean harvest moved from 85% complete a week ago to 91% as of November 17, with USDA marking one state (Louisiana) as 100% complete at this time. That matches analyst expectations as well as 2018’s pace, although 2019 progress is still a bit behind the five-year average of 95%.

President Donald Trump is again threatening to increase tariffs on China if the two countries cannot close a trade deal: “I’ll just raise the tariffs even higher.” There are still some hopes that a partial trade agreement can come together by December, although no date or venue have yet been selected.

Two South Korean buyers purchased a total of 119,000 metric tons of soymeal in private deals from optional origins earlier today. Shipment is not until March or April.

Farmers contributing to Feedback From The Field so far in November are reporting average soybeans yields of 48.3 bushels per acre, besting the latest USDA estimates of 46.9 bpa. However, individual estimates this month have varied widely, from 25 to 70 bpa. Click here to read the latest round of farmer anecdotes and view our interactive map.

Preliminary volume estimates were for 162,564 contracts, moving moderately above Monday’s final count of 138,161.

Winter wheat prices firmed on a round of technical buying and short-covering after USDA downgraded crop quality again late Monday afternoon. December Chicago SRW futures gained 4.75 cents to $5.12, December Kansas City HRW futures added 7.5 cents to $4.26, and December MGEX spring wheat futures slipped a penny lower to $5.0275.

The 2019/20 winter wheat crop is nearly all planted at this time, moving from 92% complete a week ago up to 95%. That’s slightly ahead of 2018’s pace of 92% and in line with the five-year average of 95%. And 83% of the crop is now emerged.

As expected, USDA docked crop quality for a second consecutive week, moving the percentage in good-to-excellent condition from 54% down to 52%. Another 34% of the crop is rated fair (up a point from last week), with the remaining 14% rated poor or very poor (also up a point from last week).

Japan is seeking to purchase 4.4 million bushels of food-quality wheat from the U.S. and Canada after issuing a regular tender earlier today, which closes Thursday. Of the total, more than 54% is expected to be sourced from the U.S.

Tunisia purchased 2.8 million bushels of soft milling wheat, 3.4 million bushels of durum wheat and 2.3 million bushels of feed barley from optional origins in an international tender that closed earlier today. The grain is for shipment in December or January.

Preliminary volume estimates were for 167,420 CBOT contracts, trending above Monday’s final count of 144,970.


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