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Afternoon Market Recap for Oct. 14, 2019

Grain markets mull trade vs. weather

Corn finishes nearly unchanged, with soybeans and wheat up moderately

Optimism over last week’s trade talks between the U.S. and China sputtered a bit, but traders are also still factoring in the lingering effects of last week’s widespread snow and frost across the Northern Plains and upper Midwest. The result was a narrowly mixed round of technical maneuvering Monday, with corn taking on fractional losses while soybeans and wheat climbed higher in a choppy session.

Last week’s round of snow and freezing weather has made its way through the northern U.S., but cooler-than-normal conditions will linger for the next several days, although above-normal daytime highs will return to the Plains by the end of the week. Drier conditions will also prevail for much of the central U.S. this week, although the eastern Corn Belt may see some light rains through October 19, per the latest five-day cumulative precipitation map from NOAA.

China wants to engage in anther round of talks with the U.S. before signing “phase one” of a trade deal the two nations discussed late last week during in-person negotiations in Washington. No agreements have been signed yet, despite the apparent progress last week. On Wall St., doubts over the latest trade promises had the Dow dipping 7 points lower in afternoon trading to 26,809.

And energy prices dropped 2% or more this afternoon, meantime – a testament to the fact that markets aren’t universally optimistic about the ongoing U.S.-China trade talks. Crude oil dropped back below $54 per barrel. The U.S. Dollar firmed slightly.

Grain markets were business as usual Monday, but Columbus Day is a governmental holiday. Because of that, USDA’s will release its weekly export inspection and crop progress reports on Tuesday this week.

Corn prices retreated slightly from a two-month high to close with fractional losses Monday on some technical selling. Worries over the effects of last week’s winter weather linger, however, with the next USDA updates to harvest progress and crop quality out tomorrow afternoon. December futures held steady, at $3.9775, while March futures slipped 0.25 cents lower and closed at $4.0750.

Corn basis bids were steady to mixed Monday after tumbling 10 cents lower at an Iowa processor while firming 2 to 7 cents across three other Midwestern locations today. Corn sales have been relatively slow overall as farmers try to pin down this year’s harvest prospects.

European Union corn imports reached 224.4 million bushels as of October 13, which is trending 26% higher than last year’s pace.

Harvesting frost-damaged crops? Our colleagues at Wallaces Farmer gathered some timely advice. Click here to learn more.

Meantime, lousy fall weather could have a significant impact on upcoming fertilizer purchase decisions. Farm Futures senior grain market analyst Bryce Knorr has been monitoring the latest trends – click here to find out what’s been happening in Knorr’s Fertilizer Outlook column.

Readers have been sharing more variable yields, as reported in our ongoing Feedback From The Field feature. Farmers have been sharing average corn yields of 167 bushels per acre, which is 1.4 bpa below the latest USDA estimates. Yields could fall below trendline average for the first time in seven years, in fact. Click here to read the latest round of farmer anecdotes and view our interactive map.

South Korea purchased 2.4 million bushels of corn from optional origins in a deal late last week. The grain is for arrival by Jan. 1, 2020.

Preliminary volume estimates were for 252,840 contracts, falling significantly beneath Friday’s final count of 436,209.

Soybean prices tracked moderately higher on some technical buying spurred by light U.S.-China trade optimism and lingering worries over the effects of last week’s winter weather that raked across the northern U.S. November and January futures each added 4.5 cents to close at $9.4050 and $9.55, respectively.

Soybean basis bids were largely flat Monday but did tick a penny higher at an Ohio elevator today.

Ahead of the National Oilseed Processors Association (NOPA) monthly report, out late tomorrow morning, analysts expect NOPA to show last month’s soy crush reaching 162.193 million bushels – a record for September, if realized, but down from August’s tally of 168.085 million bushels.

European Union soybean imports for its 2019/20 marketing season have reached 132.3 million bushels as of October 13, which is mostly in line with last year’s pace. EU soymeal imports are up 18% year-over-year, meantime, with EU palm oil imports down 10%.

China’s soybean imports eased 13.5% month-over-month after September totals reached 301.3 million bushels. Totals from January to September for the world’s No. 1 soybean importer are at 2.370 billion bushels.

Preliminary volume estimates were for 266,233 contracts, trending moderately below Friday’s final count of 367,792.

Wheat prices clocked moderate gains on technical buying over disruptions to winter wheat planting and spring wheat harvest after a round of lousy weather in the northern U.S. late last week. December Chicago SRW futures ticked 3 cents higher to $5.11, December Kansas City HRW futures gained 5.25 cents to $4.2475, and December MGEX spring wheat futures added 4 cents to $5.51.

European Union soft wheat exports for its 2019/20 marketing year are at 275.6 million bushels as of October 17, which is up 48% compared to last year’s pace. EU barley exports are also up 52% year-over-year so far.

Turkey issued an international tender to purchase 4.7 million bushels of durum wheat from the European Union that closes next Wednesday. The grain is for shipment between late November and mid-December.

Preliminary volume estimates were for 88,812 CBOT contracts, dropping moderately below Friday’s final count of 127,633.


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