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Afternoon Market Recap for Nov. 21, 2019

Corn hangs on for small gains.

Soybeans and wheat drift lower in Thursday’s session

Grains were mixed but mostly lower Thursday, with corn as the lone bright spot after picking up small gains over some technical buying. But soybeans finished the session about 0.5% lower on mounting frustration over U.S.-China trade negotiations, and bargain buying earlier this week for wheat shifted to profit-taking, pushing futures 1.25% to 1.5% lower today.

The latest updates to the U.S. Drought Monitor, out Thursday morning, show drought’s footprint continuing to ease from seasonal highs last month, affecting 29.7% of the nation for the week ending November 19. Problems are mostly nonexistent in the Plains and Midwest but continue to persist in large portions of the Southwest and Southeast. NOAA’s December outlook, updated this morning, calls for some wetter-than-normal conditions next month, primarily west of the Mississippi River, with warmer-than-normal conditions likely for most of the U.S.

On Wall St., the Dow inched 2 points lower to 27,819, with some lower tech stocks preventing any meaningful gains today. Traders also expressed frustration over the constant back and forth regarding U.S.-China trade negotiations that have so far failed to yield any meaningful updates. But energy futures posted another session of significant gains, with crude oil, gasoline and diesel all up around 2.75% this afternoon over anticipation of OPEC cuts. The U.S. Dollar firmed slightly.

House Speaker Nancy Pelosi backed off of earlier comments that passing the USMCA is “imminent”, telling reporters today that “I’m not even sure if we came to an agreement today that it would be enough time to finish [this year], but just depends on how much agreement we come to.” Democrats and Republicans continue to smooth out areas of disagreement in the meantime.

Commodity funds were net buyers of corn (+5,500) and soymeal (+3,000), and were net sellers of soybeans (-7,500), soyoil (-7,000) and CBOT wheat (-5,000) today.

Corn prices hung on for small gains despite fading late in Thursday’s session to finish nearly 0.5% higher on some technical buying after digesting some positive export data from USDA this morning. December and March futures each added 1.75 cents to close at $3.6850 and $3.79, respectively.

Corn basis bids were mixed at interior river terminals Thursday, holding steady at most other Midwestern locations today. Farmer sales have been picking up in recent days as the 2019 harvest wraps up.

Private exporters reported to USDA the sale of 4.2 million bushels of corn for delivery to unknown destinations during the 2019/20 marketing year – marking the third such sale reported this week.

Corn exports reached 32.8 million bushels in total sales last week, moving 36% higher from the prior week and 49% above the prior four-week average. That tally was also on the high end of trade estimates, which ranged between 5.7 million and 35.4 million bushels. Mexico took nearly half of the total, with 15.2 million bushels.

Corn export shipments found a marketing year high after reaching 26.5 million bushels and climbing 41% above the prior four-week average. Mexico was again the No. 1 destination, with 14.8 million bushels.

Argentina’s Buenos Aires Grains Exchange slightly lowered its estimates for the country’s 2019/20 corn acres, now at 15.568 million acres, as it expects some farmers to swap out corn for more soybeans this year.

Preliminary volume estimates were for 332,721 contracts, tumbling well below Wednesday’s final count of 587,358.

Soybean prices shrugged off a healthy round of export data from USDA this morning, with focus remaining on embattled U.S.-China trade relations. Prices eased another 0.5% Thursday, with January futures dropping 4 cents to $9.01, while March futures lost 3.75 cents to $9.1525.

Soybean basis bids were steady to mixed Thursday after climbing 3 to 5 cents higher at several Midwestern processors while dropping 4 to 5 cents lower at two interior river terminals today.

Soybean export sales also improved week-over-week, reaching 55.7 million bushels – a 22% improvement from last week and 39% above the prior four-week average. The tally also topped analyst estimates, which ranged between 29.4 million and 51.4 million bushels. China was the top destination, with 20.9 million bushels.

Soybean export shipments were for 62.7 million bushels – a marketing year high. China accounted for just over half of that total, with 32.1 million bushels.

Argentina’s Buenos Aires Grains Exchange has slightly raised its 2019/20 soybean acreage estimates to 43.738 million acres. The country’s agriculture ministry is expecting a somewhat lower tally, at an estimated 42.502 million acres.

Preliminary volume estimates were for 168,470 contracts, down from Wednesday’s final count of 198,496.

Wheat prices fell Thursday as traders switched from bargain buying to profit-taking. December Chicago SRW futures dropped 6.5 cents to $5.09, December Kansas City HRW futures lost 5.5 cents to $4.2050, and December MGEX spring wheat futures fell 6 cents to $4.9525 – closing below $5 for the first time in more than two months.

Wheat export sales boomed 83% higher week-over-week and 29% above the prior four-week average after reaching 16.1 million bushels. That was on the high end of trade guesses that ranged between 7.3 million and 18.4 million bushels. Unknown destinations led the charge, accounting for 4.9 million bushels.

Wheat export shipments also trended slightly above the prior week’s tally and the prior four-week average after reaching 17.8 million bushels. Mexico, China, Thailand and the Philippines were among the leading destinations.

Argentina’s agriculture ministry is anticipating a 2019/20 wheat harvest topping 698.1 million bushels.

Algeria purchased 18.4 million bushels of milling wheat in an international tender that closed yesterday. The grain could be sourced from optional origins but likely came from France and will be shipped in January.

But Algeria also announced today it will lower its wheat imports by 35% from a year ago, to just under 147 million bushels, in an attempt to save money after the economy has struggled amid lower oil prices. France will likely bear the brunt of this fallout, as it is by far the leading supplier of wheat imports to Algeria.

As expected, Japan purchased 4.4 million bushels of food-quality wheat from the U.S. and Canada in a regular tender that closed earlier today. A little over half of the total was sourced from the U.S.

Preliminary volume estimates were for 109,089 CBOT contracts, trending 14% above Wednesday’s final count of 95,846.

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