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Afternoon Market Recap for Sept. 13, 2019

Soybeans hang on for modest gains

Corn also sees a small boost in Friday’s session, with wheat coming in mixed

Another large Chinese purchase of U.S. soybeans, announced Friday morning, kept the rally for that commodity alive, although gains began to fade later in the session as traders eyed agreeable short-term weather forecasts in the Midwest and the possibility of record production from Brazil this coming season. Corn also tacked on small gains Friday, with most wheat contracts spilling into the red after securing modest gains in overnight trading Thursday.

As summer draws closer to fall, weather across some parts of the central U.S. will continue to come in warmer than average for the next several days, with daytime highs 10 degrees or more above normal in the Northern Plains and upper Midwest early next week. Weather will be relatively dry this coming week in the Midwest and Plains, meantime, although some parts of Minnesota, Iowa and Wisconsin could see another 1” or more additional rainfall through September 20, per the latest seven-day cumulative precipitation map from NOAA.

On Wall St., the Dow was on track for an eight-straight day of gains on U.S.-China trade optimism, rising 48 points in early afternoon trading to 27,230. Some concerns over rising mortgage rates, which faced the largest short-term jump since 2016, put a lid on overall optimism, however. Energy futures were narrowly mixed, with crude oil down slightly while gasoline and diesel were treading water this afternoon. The U.S. Dollar softened slightly.

Corn prices saw a moderate boost on some technical buying partly prompted by optimism over U.S.-China trade and spillover strength from soybeans. September futures gained a penny to $3.5550, while December futures added 1.5 cents to $3.6875.

In total, it was a solid week of gains for corn prices, with December futures tracking nearly 7% higher from Monday’s open.

Corn basis bids were mostly steady to mixed Friday, moving as much as 3 cents lower at an Indiana ethanol plant and 3 cents higher at a Nebraska elevator today.

Yesterday, the U.S. EPA announced it was repealing the often-maligned Waters of the U.S. (WOTUS) rule, enacted in 2015. “[This] action fulfills a key promise of President Trump and sets the stage for Step 2 – a new WOTUS definition that will provide greater regulatory certainty for farmers, landowners, home builders, and developers nationwide,” according to EPA Administrator Andrew Wheeler. Click here to learn more.

In France, consultancy FranceAgriMer trimmed its crop quality ratings for the country’s corn crop after two prior weeks of stability, moving it a point lower to 60% in good-to-excellent condition. That’s still slightly ahead of year-over-year ratings of 59%.

Preliminary volume estimates were for 225,881 contracts, cooling considerably from Thursday’s final count of 490,783.

Soybean prices saw moderate overnight gains begin to evaporate as Friday’s session wore on but still held on for small gains after USDA announced another large export sale to China this morning. September futures firmed by 1.75 cents to $8.8475, while November futures added 3.25 cents to $8.9875.

All told, December futures gained nearly 4.8% on the week, with the bulk of that upside captured in Thursday’s sizzling session.

Soybean basis bids were mixed but mostly steady Friday, firming as much as 2 cents at an Illinois river terminal but dropping 5 cents lower at an Iowa processor today. There was a general uptick in sales yesterday and today after futures shifted significantly higher from supportive USDA data and several large export sales to China.

Private exporters reported to USDA more soybean sales to China totaling 7.5 million bushels for delivery during the 2019/20 marketing year, which began September 1. That’s on top of yesterday’s announcement for 22.0 million bushels to China and Tuesday’s announcement for 5.0 million bushels to Mexico.

A survey of analysts indicates U.S. soybean crush last month could reach 162.018 million bushels – the largest August total, but 3.6% lower than July’s tally of 168.093 million bushels, if realized. The National Oilseed Processors Association will provide its official figure Monday morning.

A group of 12 analysts is expecting Brazilian soybean production for 2019/20 to rise 6.6% year-over-year, reaching a record 4.506 billion bushels. Planting season typically kicks off in September.

Preliminary volume estimates were for 161,164 contracts, falling by half from Thursday’s final count of 333,767.

Wheat prices sagged as attention returned to large domestic and global stocks. December Chicago SRW futures eased 0.25 cents to $4.8350, December Kansas City HRW futures dropped 4.25 cents to $3.9925, and December MGEX spring wheat futures slipped 1.75 cents to $5.0475.

Still, CBOT contracts picked up modest gains this week, with December Chicago SRW futures up 4.9% since Monday’s open.

USDA offered some mixed news on wheat domestic and global ending stocks in yesterday’s World Agricultural Supply and Demand Estimates (WASDE) report. U.S. stocks held steady, at 1.014 billion bushels, while world ending stocks increased from 10.487 billion bushels in August up to 10.527 billion bushels.

“As I expected, the agency made no change to its domestic wheat balance sheet,” according to Farm Futures senior grain market analyst Bryce Knorr. “Exports are off to a decent start, but improvement will take smaller production in Argentina and Australia.”

USDA significantly downgraded a smaller market’s wheat production estimates, meantime, trimming Kazakhstan’s expected harvest by more than 11% to 422.6 million bushels.

Preliminary volume estimates were for 71,041 CBOT contracts, retreating moderately below Friday’s final count of 9,409.

grainstable

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