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Afternoon Market Recap for Oct. 23, 2019

Grain prices shuffle slightly

Corn and soybeans tilted slightly lower, while wheat firmed moderately

Grain prices sputtered through most of Wednesday but fought off small overnight losses to end the session narrowly mixed after a large soybean sale and a Taiwanese tender to purchase U.S. wheat helped trigger some technical buying. Corn and soybeans finished with fractional losses, while wheat tracked around 0.5% higher today.

Cooler-than-normal weather will be common across the central U.S. into at least the middle of next week, with daytime highs falling 10 to 20 degrees below normal in many areas. The latest five-day cumulative precipitation map from NOAA shows plenty of wet weather probable for the South, stretching northward into the eastern Corn Belt, through October 28. The western Corn Belt and Plains should remain mostly dry during this time, however.

On Wall St., stocks moved slightly higher in morning trading on some positive earnings reports from Caterpillar and Boeing, but the Dow slipped 22 points lower this afternoon to 26,765. Unexpectedly lower domestic stocks pushed crude oil more than 2.5% higher today to nearly reach $56 per barrel. Gasoline and diesel also moved significantly higher this afternoon. The U.S. Dollar firmed fractionally.

Corn prices tried and failed to move higher Wednesday, shifting slightly into the red as today’s session wound down. December and March futures each slipped 0.25 cents to $3.8775 and $3.9975, respectively.

Corn basis bids were steady to mixed across the central U.S. Wednesday, moving as much as 5 cents lower at a Nebraska elevator and as much as 2 cents higher at an Illinois river terminal today.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show corn sales for the week ending October 17 ranging between 17.7 million and 33.5 million bushels – making it likely to surpass the prior week’s tepid tally of 14.5 million bushels.

Ethanol production trended higher for a third consecutive week but remained just under 1 million barrels per day for a fifth straight week, with a daily average of 996,000 barrels. December ethanol futures moved nearly 0.8% higher in afternoon trading, to $1.414.

A French farming group says the country may only harvest 484.2 million bushels of corn this year after the crop was battered by drought over the summer. Average yield estimates could fall 7.7% below the prior five-year average, to 132.8 bushels per acre.

Through September, China has imported more than 152 million bushels of corn, which is trending 33.1% above the pace of last year’s corn imports.

Just as farmers were starting to get caught up on harvest, another big storm moved through the Midwest. That could keep fall fertilizer applications slow, and the prospect of excess supplies headed into winter sent costs for most nutrients lower last week, according to Farm Futures senior grain market analyst Bryce Knorr. Find out what factors are currently in play by reading Knorr’s latest Fertilizer Outlook column.

Preliminary volume estimates were for 180,360 contracts, down slightly from Tuesday’s final count of 208,574.

Soybean prices also sputtered late in Wednesday’s session to finish with fractional losses. Ongoing harvest pressure canceled out optimism over some positive export news out earlier this morning. November futures slipped 0.25 cents to $9.3375, with January futures holding steady at $9.4825.

Soybean basis bids moved 1 to 5 cents higher at several interior river terminals and Midwestern elevators Wednesday while dropping 5 cents lower at an Indiana processor today. Farmer sales remain relatively slow this week.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show soybean sales for the week ending October 17 ranging between 29.4 million and 58.8 million bushels. Analysts also expect USDA to report an additional 100,000 to 300,000 metric tons of soymeal sales, plus another 0 to 25,000 MT of soyoil sales.

Private exporters announced to USDA the sale of 4.7 million bushels of soybeans for delivery to unknown destinations during the 2019/20 marketing year, which began September 1.

And Chinese buyers have purchased nearly 7 million bushels of U.S. soybeans earlier this week after the country’s government granted some tariff waivers, although there are still lingering concerns about reduced demand due to the devastating effects of African swine fever.

Farmers reporting to Feedback From The Field have still been consistently sharing highly variable results, including soybean yields that ranged between 25 and 70 bushels per acre. Click here to read the latest round of farmer anecdotes and view our interactive map.

Preliminary volume estimates were for 381,539 contracts, rising 17% above Tuesday’s final count of 326,902.

Wheat prices gained a bit of traction Wednesday on some technical selling, with most contracts picking up around 0.5% in the session. December Chicago SRW futures rose 2.75 cents to $5.2075, December Kansas City HRW futures picked up 2.25 cents to $4.2350, and December MGEX spring wheat futures added 3.25 cents to $5.4225.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to wheat soybean sales for the week ending October 17 ranging between 11.0 million and 22.0 million bushels.

To make up for domestic deficits, Iran plans to import as much as 110 million bushels of wheat this year. In the past, the country has purchased wheat from a variety of geographies, including the EU, Australia, Canada and the Black Sea region.

Taiwan issued an international tender to purchase 3.3 million bushels of U.S. wheat, which closes tomorrow. The grain is for shipment between early December and early January.

Turkey has made provisional purchases (still subject to final confirmation) for 4.7 million bushels of durum wheat sourced from the European Union in a series of tenders that closed earlier today.

Tunisia purchased 2.8 million bushels of milling wheat from optional origins in an international tender that closed earlier today. The grain is for shipment between late November and mid-December.

Algeria purchased 22.0 million bushels of milling wheat, likely sourced from France, in a tender that closed earlier today. The grain is for shipment in December.

Preliminary volume estimates were for 63,192 CBOT contracts, spilling moderately below Tuesday’s final count of 91,593.

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