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Afternoon Market Recap for Sept. 20, 2019

Corn can’t hold onto early gains

Soybeans and winter wheat also slide into the red Friday

Grain markets ended a mostly positive week on a sour note today on a round of technical selling and profit-taking that kicked corn, soybean and winter wheat futures moderately lower. Soybeans suffered the steepest loss on news that a Chinese delegation scrapped plans to visit some U.S. farms earlier today. Spring wheat futures bucked the overall trend, moving modestly higher in the session.

Drought’s footprint continues to creep slowly higher for a ninth consecutive week, according to the latest updates from the U.S. Drought Monitor, which shows 34.2% of the country currently afflicted by drought – reaching the highest levels since last November. Most of the problematic areas are contained in the Pacific Northwest, Southwest and Southeast, although some lingering problems still remain across parts of Iowa, Illinois, Indiana and Michigan.

On Wall St., the Dow spilled 63 points lower in afternoon trading to 27,030 after a Chinese delegation cancelled a planned visit to several Montana farms today. U.S.-China relations remain fragile ahead of the next round of high-level meetings, currently scheduled for early October. Energy futures also continued to move lower, with crude oil settling back under $58 per barrel. The U.S. Dollar firmed moderately.

Corn prices dipped slightly lower Friday on a round of technical selling partly prompted by spillover weakness from soybean and generally favorable weather forecasts this coming week. December futures fell 2 cents to $3.7075, with March futures down 2.25 cents to $3.84. December futures fell a total of 0.3% this week.

Corn basis bids were slightly mixed at Midwestern elevators Friday but steady across most other central U.S. locations today.

Growers posting Feedback From The Field this week reported widely variable yields, with corn ranging from 70 to 190 bushels per acre and soybeans making 18 to 50 bpa. How are crops looking in your area? Click here to read the latest farmer anecdotes and view our interactive map.

In the European Union, grain industry association Coceral lowered its forecast for corn production by 2.1% from May, landing at 2.425 billion bushels. The cuts are mainly due to lower production estimates in Germany and France after overly hot, dry conditions during pollination earlier this summer.

The 2019 corn harvest has kicked off in France, with consultancy FranceAgriMer again lowering quality conditions another point to 59% in good-to-excellent condition.

Did you know that farmers who sell off the combine, even at current price levels with USDA’s yield of 168.2 bushels per acre and average costs, look to break even or better assuming they receive the full Market Facilitation Program payments? Click here to learn more about the latest supply, demand and price trends at play in Farm Futures senior grain market analyst Bryce Knorr’s Corn Outlook column.

In South Africa, analysts expect a fractionally larger corn crop than August estimates, reaching 433.7 million bushels.

Preliminary volume estimates were for 203,224 contracts, moving slightly higher than Thursday’s final count of 187,035.

Soybean prices moved more than 1% lower Friday after a Chinese delegation cut short a trip to several Montana farms. (That move generated some pessimism in other markets as well.) November futures tumbled 10.25 cents lower to $8.8275, while January futures lost 9.5 cents to $8.9650. For the week, November futures settled 2.3% lower.

Soybean basis bids were largely unchanged Friday but moved 3 cents higher at an Illinois river while fading 5 cents lower at an Indiana processor today.

Amid low commodity prices against the backdrop of the ongoing U.S.-China trade war, farmers may be able to wait a little longer to make decisions on 2020 acres after receiving ARC and MFP payments. What are the current upside and downside risks? Click here to catch up on the latest Soybean Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

Meantime, House Agriculture Subcommittee on Livestock and Foreign Agriculture chair Jim Costa (D-CA) had stern words yesterday at a joint hearing to review federal farm and disaster programs. “The Market Facilitation Program cannot deliver what farmers have lost due to the administration’s trade war … [and] I fear this is becoming the new normal,” he said.

Preliminary volume estimates were for 147,590 contracts, down slightly from Thursday’s final count of 160,276.

Wheat prices were mixed again today on some uneven technical maneuvering. Winter wheat futures continued to spill lower, with December Chicago SRW futures down another 3.75 cents to $4.8425 and December Kansas City HRW futures down another 2 cents to $4.0750. Spring wheat futures continued to climb after rainy weather slowed the pace of harvest in some key production areas, with December futures adding 4 cents to $5.2425.

CBOT futures traded in a relatively narrow channel this week but ultimately fell 0.7% lower since Monday’s open.

EU grain association Coceral has upped its 2019 soft wheat crop production estimates by 2.1% since May to 5.265 billion bushels, which would climb 11.3% higher than 2018 totals, if realized. Improved yield potential in the UK and France was the biggest factor for the upward revision.

In Russia, consultancy IKAR is holding steady its 2019 wheat production forecast at 2.756 billion bushels but says it may make upward revisions in the near future.

Ukraine’s wheat exports have topped 267 million bushels since July, with total grain exports in the country’s 2019/20 marketing year trending 52.5% higher year-over-year so far.

Preliminary volume estimates were for an anemic 53,943 CBOT contracts, trending nearly 23% below Thursday’s final count of 70,035.


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