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Afternoon Market Recap for April 27, 2017

Frosty forecast lifts winter wheat.

April 27, 2017

Cold, wet weather a concern for corn, soybeans

Winter wheat futures closed higher and at one-week high as forecasts have freezes as far south as northern Texas during the weekend, which could hurt headed wheat.

Corn and soybeans also got support from cold, wet forecasts for the Midwest. Rain and snow are possible this weekend for parts of Kansas, Nebraska and Iowa. 

Traders are exiting May contracts ahead of first notice day on Friday. A Reuters poll expects zero to 600 corn deliveries, mostly 200 to 500 soybeans but a few higher estimates, 300 to 800 wheat and 200 to 600 KC HRW wheat.

Wall Street had modest gains when the crops closed helped by some positive quarterly earnings. President Trump’s tax-cut plan is drawing scrutiny amid ideas it could increase the federal deficit. Crude oil was lower again, while both the dollar and gold moved higher. 

Exports – USDA, Reuters:

  • Weekly export sales: total old- and new-crop, mln bu (prev week): corn 39.3 (33.4), soybeans (32.4 (8.3), wheat 13.5 (20.3).
  • Israel bought 70,000 to 80,000 metric tons of corn, about 30,000 of feed wheat and about 20,000 of feed barley from optional origins. The corn may come from South America and the other grains possibly from the Black Sea region, European sources said. Shipment is expected for July/August.
  • Iraq seeks to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes May 7.

Corn futures closed 2-1/2 to 3 cents higher to finish under key moving averages. May and July briefly topped the 20- and 200-day averages but could not stay there.

Also supportive to corn was news President Trump wants to retain NAFTA but renegotiate some slements of it. That is a change from White House comments yesterday that he wanted to withdraw from the agreement. The withdrawal comments drew quick reactions from farm groups, which fired off letters to Washington opposing the move. 

Forecasts have cold, wet weather for the Midwest this week with snow likely on Saturday. Rain amounts of 4 to 8 inches are likely along mid-Mississippi Valley during the weekend. The 6- to 10-day outlook (May 2-6) is cold for the Midwest but drier.

The CBOT’s estimated volume for Thursday was 460,411. Wednesday’s actual volume was 593,730. Open interest in Wednesday’s lower market decreased by 36,794 with May’s 45,740 and July’s up 9,053. 

May corn closed up 3 at $3.62, July up 2-1/2 at $3.69-1/4. New-crop December rose 2-1/2 to $3.86-3/4. 

What to Look For: Attention remains on the weather and how much planting can be done. May 15 looms large in many farmers’ minds as planting after that can affect yields, particularly in the northern areas of the western cornbelt.

 

Soybeans closed unchanged to a fraction higher, helped by President Trump’s revised stance on NAFTA. The better-than-expected weekly export sales helped with yearly sales already more than what USDA has forecast for the year. 

However, the weather news may have capped gains. There is a perception the cold, wet conditions could delay corn planting and shift some acres to soybeans. The amount of switching would depend on how many acres had nitrogen. 

Planting delays have been a concern for Canada’s canola and have pushed that market higher. Old-crop canola months were lower today, but new-crop months were higher again.

The CBOT estimated volume for Thursday was 214,380. Wednesday’s actual volume was 349,316. Wednesday’s open interest decreased by 25,031 in the lower market with May’s down 28,514 and July’s up 3,289. November’s open interest decreased by 1,735.

May soybeans closed unchanged at $9.45-3/4 per bushel and July was up ¾ at $9.57-1/4. New-crop November rose ½ at $9.54-1/2. 

What to Look For – Financial and equity markets have been garnering headlines and attention. The May 7 French vote looms large and, depending on the results, could send tremors through a number of markets including commodities.

 

Winter wheat markets had solid gains, led by HRW, as the forecasts put freezing weather in the Plains through early next week.

The National Weather Service said the cold on Sunday and Monday could threaten headed wheat. Also, the 6- to 10-day outlook, (May 2-6) favors below-normal temperatures for that region. 

That 6- to 10-day is dry from the northern Plains, conditions that could favor planting of spring wheat, which has been slowed by cold, wet conditions.

Weekly export sales were disappointing for old-crop supplies, but better-than-expected for new-crop. The new-crop year starts June 1.

CBOT estimated volumes for Thursday was 136,387. Wednesday’s actual volume was 172,516. Wednesday’s open interest decreased by 12,943 with May’s down 15,227 and July’s down 406.

Chicago’s May soft red winter wheat closed up 5-3/4 at $4.13-1/2 and July up 4-3/4 at $4.31-1/4. Kansas City’s May hard red winter wheat rose 8-1/2 to $4.20-3/4 and July rose 8-1/2 to $4.33-3/4. Spring wheat for May rose 2-1/4 to $5.40 and July rose 2-1/2 to $5.53-1/4.

What to Look For – The weekend cold could threaten headed winter wheat. USDA on Monday said 67% of the wheat in Texas was headed, 65% in Oklahoma, and 25% in Kansas.

More from Farm Futures:

Weekly Corn Review
Weekly Soybean Review
Weekly Wheat Review

 

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