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Afternoon Market Recap for Oct. 22, 2019

Corn and soybeans find small gains Tuesday

Wheat prices mixed in a mostly uneventful session

Grain prices were mixed but mostly higher Tuesday, as technical buying helped corn, soybeans and spring wheat futures carve out small gains in today’s session. Winter wheat futures bucked the overall trend, slumping around 1% lower as the 2019/20 U.S. crop’s planting pace caught back up to typical levels this past week.

Cooler-than-normal daytime highs will settle over a large portion of the central U.S. later this week into the weekend. Current Jetstream patterns suggest sharply colder weather may wrap up the month of October next week. Per the latest seven-day cumulative precipitation map from NOAA, the South should see plenty of additional moisture through October 29, with only light rains expected for most of the Corn Belt during this time.

With mostly positive corporate earnings reports rolling in yesterday and today, Wall St. stayed in the green, with the Dow trending 70 points higher in afternoon trading to 26,907. Energy prices rebounded Tuesday after facing moderate cuts Monday. Crude oil moved more than 1.5% higher this afternoon to clear back above $54 per barrel, with diesel and gasoline finding only small gains. The U.S. Dollar also firmed slightly.

Corn prices saw moderate gains heading into Tuesday, which mostly bled out as the day progressed but still closed barely in the green at the close. December futures inched 0.75 cents higher to $3.88, while March futures picked up half a penny to reach $4.00.

Corn basis bids were steady to mixed Tuesday, inching 1 to 2 cents higher at two Midwestern locations but tumbling as much as 15 cents lower at an Indiana ethanol plant today. Farmer sales have been generally sluggish so far this week.

USDA has marked 30% of this year’s corn harvest as complete by October 20, according to its latest report. That’s ahead of the prior week’s tally of 22% but below analyst expectations of 34%. Harvest pace is now further behind that of recent years, with a five-year average of 47%.

And 86% of this year’s crop is now fully mature, which is better than the prior week’s total of 73% but well behind 2018’s pace of 99% and the five-year average of 97%.

But USDA saw slight improvement to corn crop quality last week, adding a point to reach 56% in good-to-excellent conditions. That bucked analyst expectations, which assumed the agency would lower that number to 54%.

Preliminary volume estimates were for 208,630 contracts, falling a bit below Monday’s final count of 222,665.

Soybean prices followed the same general pattern as corn today – starting off strong, fading as the session progressed but still closing with small gains. November futures added 0.75 cents to $9.34, with January futures up 1.5 cents to $9.4825.

Soybean basis bids were mixed but mostly higher Tuesday, rising 2 to 10 cents higher across a handful of Midwestern locations today. An Illinois processor bucked the trend, falling 5 cents, however.

China has offered tariff-free quotas to several state and private soybean crushers in the amount of 367 million bushels, infusing some fresh optimism into ongoing U.S.-China trade negotiations. Buyers are reportedly looking to book cargoes for late 2019 and/or early 2020.

Soybean harvest showed some momentum this past week, with a fifth of the crop getting combined. That places total progress at 46%, putting this year’s pace close to 2018’s 51% but still moderately behind the five-year average of 64%. Ninety-four percent of the crop is dropping leaves, versus last year’s pace of 98% and the five-year average of 97%.

From a quality standpoint, soybeans held their ground this past week, with 54% of the crop still in good-to-excellent condition. Another 32% of the crop is rated fair, with the remaining 14% rated poor or very poor – all unchanged from a week ago.

Preliminary volume estimates were for 326,902 contracts, firming 42% above Monday’s final count of 229,458.

Wheat prices were mixed Tuesday following an uneven round of technical maneuvering, with winter wheat contracts losing around 1% while spring wheat futures firmed slightly. December Chicago SRW futures fell 5.5 cents to $5.18, December Kansas City HRW futures dropped 4.75 cents to $4.2075, and December MGEX spring wheat futures added 1.25 cents to $5.3975.

This year’s spring wheat harvest inches closer to the finish line – moving from 94% a week ago up to 96% as of October 20 – but that crop is typically completely wrapped up by this time of year. States recently slammed with snow, including Montana (92%) and North Dakota (95%) still have the furthest to go.

Winter wheat planting, in contrast, has moved slightly ahead of the pace of recent years after reaching 77% completion. Last year’s pace was 71%, with a five-year average of 75%. Fifty-three percent of the crop is now emerged, which is also in line with the prior five-year average.

Buyers are starting to show some interest in wheat again, according to Farm Futures senior grain market analyst Bryce Knorr. There are several reasons for this – find out more in Knorr’s latest Wheat Outlook column.

Ukraine’s agriculture ministry is expecting the country to harvest 1.032 billion bushels of wheat this year, which would trend 14.2% higher than 2018’s totals, if realized.

Turkey has provisionally purchased nearly 7.0 million bushels of red milling wheat from the European Union in a series of tenders that closed earlier today. The grain is for shipment between late November and mid-December.

Jordan received four offers but made no purchases in its most recent international tender for 4.4 million bushels of milling wheat that closed earlier today. A similar tender will likely be issued this coming week.

Preliminary volume estimates were for 91,593 CBOT contracts, moving slightly above Monday’s final count of 87,206.

grainstable

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