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Afternoon Market Recap for Oct. 21, 2019

Grain prices slide lower

Wheat and corn land moderate cuts, with soybeans down fractionally

Grain prices tilted lower to start the week on a round of technical selling, with corn prices falling around 1%, with some wheat contracts down nearly 2% in the session. Soybeans only faced a fractional decline, however, thanks to another solid round of export inspection data out this morning.

Daytime highs should come in slightly lower than normal across the central U.S. to start the week, although some above-normal temperatures will be possible east of the Mississippi River. The next three days shouldn’t bring a lot of additional rainfall, per the latest 72-hour cumulative precipitation map from NOAA, although some moisture cold land in the Southern Plains and parts of the upper Midwest through Friday.

On Wall St., some positive earnings reports kept the Dow in the green this afternoon, moving 50 points higher to 26,820. But worries over global demand pushed energy prices lower, with crude oil falling nearly 1% this afternoon to stay below $54 per barrel. Gasoline and diesel also faced moderate gains to start the week. The U.S. Dollar firmed fractionally.

Corn prices trended about 1% lower Monday on a round of technical selling amid some tepid export inspection data and general harvest pressure. December futures fell 3.75 cents to $3.8725, with March futures down 3.25 cents to $3.9950.

Corn basis bids were steady to slightly mixed Monday after slipping 2 to 3 cents lower across a handful of Midwestern locations while firming 4 cents at an Illinois ethanol plant today.

Corn export inspections moved from 18.9 million bushels the prior week up to 20.9 million bushels for the week ending October 17. That was in the middle of trade estimates, which ranged between 17 million and 25 million bushels. Mexico (9.1 million) and Colombia (7.1 million) accounted for more than 75% of the total.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to show 34% of the corn crop harvested as of October 20 – up from 22% last week. Analysts also think USDA will lower crop quality by a point, with 54% in good-to-excellent condition.

European Union corn imports for 2019/20 are at 244 million bushels as of October 20, which is trending 27% higher year-over-year.

Preliminary volume estimates were for 222,665 contracts, moving above Friday’s final count of 199,618.

Soybean prices faded slightly Monday as traders await more details from the latest round of U.S.-China trade negotiations. Prices could see an upward swing as early as tomorrow, however, depending on how USDA updates its harvest progress and crop quality estimates later this afternoon. November and January futures each slipped 0.75 cents lower to close at $9.3325 and $9.4675, respectively.

Soybean basis bids tracked 4 cents higher at an Ohio elevator and an Indiana processor Monday while holding steady elsewhere across the central U.S. today.

Soybeans saw a total tally of 47.6 million bushels in export inspections last week, moving moderately above the prior week’s total of 35.1 million bushels and landing on the high end of trade estimates that ranged between 33 million and 51 million bushels. Egypt was the No. 1 destination, with 7.5 million bushels.

Ahead of this afternoon’s USDA crop progress report, analysts expect the agency to show 42% of the soybean crop has now been harvested, up from 26% a week ago. Analysts also expect USDA to dock crop quality a point, with 53% in good-to-excellent condition.

European Union soybean imports for 2019/20 reached 143.3 million bushels as of October 20, slipping 1% year-over-year. EU soymeal imports are up 16% from a year ago, meantime, with palm oil imports down 7% so far.

Brazil’s AgRural estimates 21% of the country’s 2019/20 soybean crop is now in the ground, noting that the major production state of Paraná is off to its slowest start since 2011.

South Korea issued a series of international tenders to purchase 5.5 million bushels of non-GMO soybeans from optional origins for delivery between March of 2021 and May of 2023. The tenders do not close until November 11.

Preliminary volume estimates were for 232,077 contracts, firming slightly above Friday’s final count of 226,046.

Wheat prices saw a moderate decline Monday on some technical selling and profit-taking after reaching three-month highs late last week. December Chicago SRW futures fell 8.75 cents to $5.2350, December Kansas City HRW futures dropped 8 cents to $4.2575, and December MGEX spring wheat futures lost 6.75 cents to $5.3825.

Wheat export inspections saw a slight week-over-week improvement for the week ending October 17, climbing from 18.3 million bushels up to 20.8 million bushels. That was on the high end of trade estimates, which ranged from 14 million to 22 million bushels. The Philippines led all destinations, with 6.9 million bushels.

Ahead of this afternoon’s crop progress report from USDA, analysts expect the agency to show 77% of the winter wheat crop planted as of October 20, up from 65% a week ago. Analysts also anticipate the spring wheat harvest has reached 97% completion, inching up from 94% last week.

European Union soft wheat exports for 2019/20 are at 297.6 million bushels as of October 20, which is trending 51% higher than a year ago. EU barley exports are also up 45% from last year’s pace.

Russia’s estimated wheat exports for October are at just over 121 million bushels, which would be the lowest monthly total since July, if realized.

Saudi Arabia has purchased 22.2 million bushels of wheat in a tender from optional origins. Some of the offers included U.S. wheat. The grain is for shipment in February and March.

Algeria issued a tender to purchase 1.8 million bushels of milling wheat from optional origins, which closes tomorrow. (Algeria often purchases more wheat than the nominal volume listed, however.)

Preliminary volume estimates were for 87,206 CBOT contracts, sliding slightly below Friday’s final count of 90,692.

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