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Afternoon Market Recap for Sept. 19, 2019

Exports, trade turn soybeans green

Corn also moves higher, with wheat turning in mixed results Thursday

Soybean futures held on for moderate gains Thursday, thanks to a better-than-expected round of export sales data, and amid trade talks with China that kicked off this morning. Corn also trended higher on a solid round of export data from USDA, with wheat turning in a mixed performance in today’s session.

NOAA’s Climate Prediction Center says the U.S. forecast for October through December largely favors above-normal temperatures throughout the fall. Short-term forecasts will also highlight above-normal daytime highs, especially in the upper Midwest and Northern Plains. Plenty of rain is also likely this coming week across much of the Corn Belt, with some areas expecting 3” or more additional accumulation through September 26.

On Wall St., strong performances from tech stocks were enough start the Dow off with moderate gains, which were whittled away later in the session as nervous investors fretted about the ongoing U.S.-China trade war. Energy futures were mostly higher, with gasoline leading the charge after rising more than 2% this afternoon. The U.S. Dollar softened moderately.

Corn prices got a small boost from a healthy round of export sales data from USDA this morning, although gains were limited by favorable near-term weather forecasts. December and March futures each added 1.5 cents to close at $3.7275 and $3.84, respectively.

Corn basis bids were mixed but mostly lower Thursday after falling 1 to 5 cents across multiple Midwestern locations today.

Corn exports found 57.7 million bushels in old crop sales plus another 2.6 million bushels in new crop sales for the week ending September 12, for a total of 60.2 million bushels. That tally roughly tripled the prior week’s total of 19.6 million bushels and moderately exceeded the average trade guess of 43.3 million bushels.

Corn export shipments were a much more modest 18.0 million bushels last week. Mexico by far leads all destinations for U.S. corn export commitments so far during the 2019/20 marketing year, with 55% of the total. Total commitments are at the lowest level in 15 years for Mid-September, however.

Consultancy Strategie Grains slightly raised its projections for 2019/20 EU corn production to 2.512 billion bushels.

Analysts expect Brazil’s corn crop to exceed 100 million metric tons this coming crop season for the first time on record, with an average estimate of 102.3 MMT (4.027 billion bushels). If realized, that would surpass last year’s harvest by 2.3%.

Preliminary volume estimates were for 187,876 contracts, sliding 9% below Wednesday’s final count of 205,916.

Soybean prices moved moderately higher Thursday on a wave of general U.S.-China trade optimism and a round of better-than-expected export data from USDA. November futures climbed 4.25 cents to $8.93, with January futures up 3.75 cents to $9.06.

Soybean basis bids were largely flat Thursday but slightly mixed across Midwestern locations after ticking a penny higher at an Ohio elevator while dropping 5 cents at an Illinois river terminal today.

U.S.-China trade negotiations kicked off for the first time in nearly two months today in Washington, with the focus on laying some groundwork between the two countries ahead of higher-level talks set for early October. “Sessions on agriculture will get a disproportionate amount of airtime,” according to one source, although U.S. Commerce Secretary Wilbur Ross told reporters at Fox business News earlier today that “it’s more complicated than just buying a few more soybeans.”

Soybean export sales took a big leap forward last week, with 63.5 million bushels in total sales. That was well ahead of the prior week’s tally of 43.1 million bushels and nearly double trade estimates of 33.1 million bushels.

Soybean export shipments were for 25.8 million bushels. So far during the 2019/20 marketing year, unknown destinations takes the lead for U.S. soybean export commitments, accounting for 36% of the total.

Preliminary volume estimates were for 160,372 contracts, up moderately from Wednesday’s anemic final count of 91,453.

Wheat prices were mixed, with winter wheat prices sliding slightly lower on a round of profit-taking after reaching one-month highs earlier this week. December Chicago SRW futures fell 1.5 cents to $4.88, with December Kansas City HRW futures slipping a half-cent lower to $4.0950. Spring wheat contracts bucked the trend, moving moderately higher on a round of technical buying. December MGEX spring wheat futures added 7 cents to $5.2025.

Wheat sales were a relative disappointment last week after notching just 10.5 million bushels. That was less than half of the prior week’s tally of 22.1 million bushels and moderately below trade estimates of 16.5 million bushels.

Wheat export shipments fared better, with 18.8 million bushels. With the 2019/20 marketing year now more than a quarter complete, Mexico leads all destinations of U.S. wheat export commitments, with 15% of the total.

Consultancy Strategie Grains expects a 14% recovery from last year’s drought-stressed wheat crops, with 2019/20 soft wheat production estimates now at 5.309 billion bushels. Exports are also expected to rise this marketing year, topping an estimated 944 million bushels.

Tunisia purchased 1.5 million bushels of soft milling wheat and another 2.3 million bushels of barely from optional origins in an international tender that closed earlier today. The grain is for shipment in October or November.

Egypt purchased 6.6 million bushels of wheat from Russia in a tender that closed Wednesday. The grain will be shipped in late October.

Preliminary volume estimates were for 70,046 CBOT contracts, dropping fractionally below Wednesday’s final count of 71,278.


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