Missed some market news this week? Here’s a look back.

Monday, May 7, 2018

Grain futures succumbed to more profit taking overnight, breaking their two-week rally as traders believe growers made rapid progress planting last week. 

A wet, cold start to spring finally gave way to better conditions last week, and growers wasted no time taking advantage of the dramatic shift. Farmers reporting Feedback From The Field noted rapid progress planting corn and getting a good start on soybeans as well.

Last week was the first good week for planting across much of the nation and farmers made rapid progress. Bryce Knorr suspects corn planting progress will be near five-year average in this afternoon's USDA Crop Progress report. Late planting is off the table in most parts of the country.

For the week ending May 3, corn export inspections came up big, surpassing trade guesses by a moderate margin. That wasn’t enough to lift futures prices, which were down 1% after the latest USDA data was released due to increased planting expectations and other factors. Soybeans slumped even further, meantime, amid anemic export data, albeit with totals that were in line with trade estimates. Wheat also posted another unimpressive export total last week.

Often, when spring planting starts slow, it’s not hard to catch up once farmers can find a little traction with favorable weather. And 2018 was no exception – with some warmer weather, they made significant progress.

Tuesday, May 8, 2018

Farmers finally got their wheels moving last week, at least in the central Midwest, where planting progress was strong. Expectations of good progress helped dump the markets yesterday, but one component of the soy complex posted gains – soybean oil. However, most of this buying was related to short covering because vegetable oils have been the weak link of the trade lately.

Wednesday, May 9, 2018

Grain futures are steady to lower after a choppy overnight session that has the market trying to hold on to momentum from Tuesday’s turnaround rally. A return to wet weather in the Midwest provides support, but also will create good conditions for field that are planted. 

Thursday, May 10, 2018

USDA’s May production, supply and demand reports are always a big deal for the market because they feature the agency’s first forecasts for new crop. This year the agency must answer a host of questions with its data dump, due at 11 a.m. CST. Will USDA lower its forecast of “normal” corn yields due to slow planting? Will the U.S.-China trade dispute lower soybean exports? And what about the beleaguered winter wheat crop – how has bad weather hurt production? 

Corn and wheat export sales turned in pretty dismal results for the week ending May 3, dipping well below the prior week’s totals and failing to meet trade expectations. Soybean export sales couldn’t match trade expectations, either, but came very close.

The latest World Agricultural Supply and Demand Estimates report from USDA gave grain markets some semi-bullish news, kicking up corn, soybean and wheat prices moderately higher soon after the report was released.

Friday, May 11, 2018

USDA’s May 10 reports had mostly friendly news about price potential for 2018 crops, but the market had a mixed reaction. Soybeans fared the best after the agency projected sharply lower U.S. inventories due to lower production and record export sales. But USDA’s forecast hinges on growing imports by China, which could be threatened by the ongoing trade dispute with the U.S. 

Grain futures are posting modest losses this morning following mixed trade Thursday in the wake of major reports from USDA. The dollar is weaker, continuing to ease following a move to new 2018 highs earlier this week. Gold is finding favor with the weaker greenback, which is also helping to keep crude oil firm and trading above $71 a barrel.

The unresolved trade conflict between the U.S. and China put pressure on soybean prices Friday, kicking contracts nearly 2% lower. Meanwhile, larger-than-expected U.S. crops weigh heavily on wheat prices, with corn down moderately due to spillover weakness and other technical factors.

It was a yo-yo week, with corn, soybeans and wheat all ending on a down note. Soybeans got the most bullish news they could in this week's WASDE report, out on Thursday. Listen to Ben Potter’s weekly market audio.

Friday’s final tally of fund positions officially showed big speculators adding to bullish bets in agriculture early in the week. But these traders were already selling soybeans, even before the market broke sharply despite what seemed like a bullish USDA report. Here’s what funds were up to through Tuesday, May 8, when the CFTC collected data for its latest Commitment of Traders put out on Friday.

Market outlooks

Fertilizer Outlook – Higher crop prices can bring higher fertilizer costs as extra acres come into production and farmers are willing to add nutrients to raise yields. But the two-week rally in the grain market didn’t appear to stimulate fertilizer prices yet as demand globally remains sluggish. U.S. retail costs appeared flat last week as wholesale values weakened. 

Energy/Ethanol Outlook - Growers topping off fuel tanks as planting reaches its peak are paying the highest prices in more than 3 ½ years. A rally in crude oil started by tightening inventories took a new leg higher this week on the U.S. decision to withdrawn from the Iran nuclear deal. Though nobody really knows what that means, the threat that reimposition of sanctions will limit Iran’s exports was enough to take crude past $71 a barrel.

Soybean Outlook - USDA provided the most possible bullish report for soybeans May 10. First the agency cut its forecast of 2017 crop stocks due to stronger crush. Then bean counters in Washington said new crop carryout would drop to 415 million bushels in the year ahead.