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Afternoon Market Recap for Oct. 15, 2019

Grains see red

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

Grain prices saw moderate cuts Tuesday on some technical selling as traders continue to balance trade news (or lack thereof) with weather headlines and the latest batch of export inspection data. Corn and some wheat contracts were down more than 1% today, with soybeans fading about 0.75% lower.

Cooler-than-normal weather across the central U.S. could give way to some slightly above average temperatures by the weekend. The latest five-day cumulative precipitation map from NOAA still shows mostly dry conditions across the western Corn Belt through Sunday, although the eastern Corn Belt could pick up some light or moderate rainfall through October 20.

On Wall St., some booming healthcare and bank stocks sent the Dow tilting 288 points higher in afternoon trading, to 27,076, although some lingering doubts over a possible future recession still linger. Energy prices slumped, in contrast, with crude oil falling more than 1.5% this afternoon to back below $53 per barrel on higher domestic inventories. The U.S. Dollar softened slightly.

Corn prices saw moderate cuts Tuesday on some technical selling partially spurred by another tepid round of export inspection data from USDA this morning. December futures fell 4.5 cents to $3.9325, with March futures dropping 3.25 cents to $4.0425.

Corn basis bids were largely steady Tuesday but saw two big swings after moving 13 cents higher at an Iowa river terminal but tumbling 10 cents lower at an Iowa processor today. Farmer sales have been relatively slow overall.

Corn’s export inspection totals for the week ending October 10 eased slightly from the prior week’s tally of 18.6 million bushels to finish with 18.5 million bushels for the week ending October 10. That was on the low end of trade estimates that ranged between 15 million and 27 million bushels. Mexico once again emerged as the No. 1 destination, with 7.4 million bushels.

Ahead of this afternoon’s USDA crop progress report, analysts expect the agency to show corn harvest at 24% complete, compared to 15% a week ago. Analysts also expect USDA to lower crop quality by a point, with 55% of the crop in good-to-excellent condition.

Is production potential in Illinois a signal that nationwide corn yields may fall below the trend line for the first time in seven years? Farmers reporting to Feedback From The Field are reporting a wide range of results so far in the Land of Lincoln that have ranged between 120 and 215 bushels per acre. What’s happening in your area? Click here to read the latest farmer anecdotes and view our interactive map.

In Ukraine, analyst APK-Inform expects the country’s 2019 corn harvest to drop 1.8% below prior estimates, reaching 1.306 billion bushels. Exports are also expected to decrease 1.1% over prior estimates, now at 1.043 billion bushels.

Preliminary volume estimates were for 216,341 contracts, down 14% from Monday’s final count of 251,284.

Soybean prices fell moderately after traders shrugged off a solid round of export inspection data this morning – anxious for more concrete details in the latest round of U.S.-China trade negotiations that concluded late last week. November and January futures each lost 6.5 cents to close at $9.34 and $9.4850, respectively.

Soybean basis bids were steady to firm Tuesday, rising as much as 15 cents higher at an Iowa river terminal and 12 cents higher at an Illinois processor today.

Private exporters reported to USDA the sale of 5.2 million bushels of soybeans for delivery to unknown destinations for the 2019/20 marketing year, which began September 1.

Soybean export inspections also eased slightly week-over-week, moving from 38.6 million bushels down to 35.1 million bushels. That was in the middle of trade estimates that ranged between 27 million and 45 million bushels. Egypt was the No. 1 destination, with 7.7 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show 25% of the U.S. soybean harvest complete, up from 14% a week ago. Analysts also expect USDA to dock crop quality a point, falling to 52% in good-to-excellent condition.

The National Oilseed Processors Association (NOPA) reported a September soybean crush of 152.566 million bushels, which was 9.2% below the August crush and well below analyst estimates of 162.193 million bushels. NOPA also says soyoil stocks rose from 1.401 billion pounds in August up to 1.442 billion pounds – the first increase in the past five months.

Bloomberg reports that China is unlikely to make $40 to $50 billion in U.S. agricultural purchases as previously noted by President Trump, according to sources familiar with the ongoing trade negotiations. China will likely ask for “reciprocal actions” before signing any deal, which could still be inked when the two countries meet next month in Chile for the Asia-Pacific Economic Cooperation summit.

Preliminary volume estimates were for 240,041 contracts, tilting slightly below Monday’s final count of 265,023.

Wheat prices followed corn and soybeans lower on some technical selling Tuesday, with a mediocre round of export inspection data doing no favors. December Chicago SRW futures dropped 4 cents to $5.07, December Kansas City HRW futures fell 5.25 cents to $4.2050, and December MGEX spring wheat futures lost 6.5 cents to $5.4475.

Wheat export inspections eased slightly from the prior week’s tally of 17.6 million bushels down to 17.0 million bushels last week. That was in the middle of trade estimates that ranged between 11 million and 22 million bushels. Japan was the No. 1 destination, with 3.1 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show minimal progress for the spring wheat harvest, moving from 91% complete a week ago up to 94%. Winter wheat’s planting pace may fare somewhat better, with analysts estimating that progress moved from 52% a week ago up to 66%.

Analyst APK-Inform has raised its estimates for Ukraine’s 2019 wheat harvest by 1.4% to 1.025 billion bushels. The consultancy also projects Ukraine’s 2019/20 wheat export forecast up another 4.5% to 683 million bushels.

Preliminary volume estimates were for 56,063 CBOT contracts, sliding moderately below Monday’s final count of 88,812.

grainstable

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