Feb. 21, 2017
Corn higher after two-day slide, wheat lower
Soybeans closed lower on the first day of this holiday-shortened week and down for the third straight session as market bulls appear to be backing away as Brazil’s big harvest speeds forward.
Corn was able to recover after two days of losses to close higher on Tuesday helped by export sales to Japan and unknown destinations.
Wheat fell for the third day and is now the lowest in more than a week despite an export sale to unknown destinations.
Wall Street did not appear to be a factor, with Dow Jones industrials up more than 100 points following better-than-expected results from a few retailers. The dollar charged higher and is near a one-week high and that put pressure on gold, which was a little lower. Crude oil was up about 70 cents a barrel.
Exports – USDA, Reuters:
- USDA late on Tuesday corrected its export sales announcement earlier in the day to withdraw the 10.6 million bushels of corn sold to Japan.
- USDA said 4.38 million bushels of 2016/2017 corn was sold to unknown destinations and 5.1 million bushels of wheat to unknown destinations. The wheat included 2016/2017 1.6 million of hard red winter, 824,813 hard red spring, 870,738 white wheat and 99,198 durum. For 2017/2018 the amounts were 815,628 hard red winter, 411,488 hard red spring and 462,924 white.
- South Korea bought 62,000 metric tons of optional-origin corn for arrival about May 20. It paid $194.10 a ton c&f, plus $1 a ton surcharge for additional port unloading.
- Egypt seeks an undisclosed amount of wheat for March 25-April 4 shipment. The wheat can be from a number of sources including the U.S. Results are due on Wednesday.
- Taiwan’s flour mill group seeks to buy 102,950 metric tons of U.S. wheat for April to May shipment. The tender deadline is Feb. 22.
- Jordan seeks to buy 100,000 metric tons of hard wheat and 50,000 of barley from optional origins. Wheat offers are due Feb. 21 and barley offers a day later.
- Libya extended the deadline for offers in its wheat, durum and corn tender to the end of March. It seeks 100,000 metric tons of wheat, 50,000 of durum and 75,000 of corn for April-May shipment.
Corn closed a penny higher to keep it just above key moving averages. The gains followed the export sale of 4.38 million bushels to unknown destinations. After the market closed, USDA withdrew the export sale of corn to Japan.
Funds have favored the long side on corn. The latest CFTC data showed funds added more than 60,000 contracts to their net long positions during the week ended Feb. 14.
Trading was moderate after recent active session.
The CBOT estimated Tuesday’s corn volume at 378,002 compared with Friday’s actual volume of 423,431. Open interest in Friday’s lower market decreased by 1,359 with March’s down 34,422 and May’s up 22,852.
March corn closed up 1 at $3.69-1/4 per bushel and May up 1 at $3.76-1/2.
What to Look For: Estimates for this year’s corn and soybean plantings are beginning to circulate. Farm Futures puts corn acreage at 90.48 million vs 2016’s 94 million; soybeans at 90.52 million vs 83.4 million and wheat at 45.68 million vs 50.2 million.
Soybeans lower close put March under the 20- and 50-day moving averages and near a one-month low.
Brazil is harvesting a big crop and that harvest is nearly 25% done, well ahead of the 17.1% five-year average, a Brazil consultancy said on Monday. Mato Grosso’s harvest is at 52% versus the 30% average while Parana is at 18% versus 23.2%. Australia’s harvest will be under way in March.
The CBOT estimated Tuesday’s volume at 274,871 compared with Friday’s actual volume of 333,155. Friday’s open interest decreased by 11,116 contracts in the lower market with March’s down 17,391 and May’s down 1,605.
March soybeans closed down 6-1/4 cents at $10.26-1/4 per bushel and May down 6 at $10.37-1/4. New-crop November dropped 3-3/4 to $10.14-1/2.
What to Look For – Funds entered the week net long soybeans, but likely pared those positions in recent sessions. Friday’s CFTC report said funds added more than 18,000 contracts to their net long position as of Feb. 14.
Wheat futures closed lower as there appeared to be a lack of reasons to be a buyer. Soft red winter is the lowest in more than a week after the three-session decline.
Funds entered the week net long hard red winter wheat and net short in the soft red winter. Friday’s CFTC report said fund increased the net long in hard red winter and trimmed their net short position in soft red winter as of Feb. 14.
After Tuesday’s close, Egypt announced its tender to buy an undisclosed amount of wheat for March 25-April 4 shipment. The wheat can be from a number of sources including the U.S., however, U.S. wheat has not been price competitive in previous tenders. Results are due on Wednesday.
The CBOT estimated Tuesday’s soft red winter wheat’s volume at 143,129 compared with Friday’s actual volume of 159,391. Friday’s open interest decreased in the lower market by 2,933 with March’s down 14,040 and May’s up 6,903.
Chicago’s March soft red winter wheat closed down 5 at $4.36 per bushel and May down 5-3/4 at $4.49-3/4. Kansas City’s March hard red winter dropped 4 to $4.52-1/4 and May slipped 3-3/4 to $4.65-1/2. Spring wheat for March dropped 5 to $5.41-1/4 while May fell 5 to $5.49-1/2.
What to Look For – SRW wheat came to rest just above chart support at the 20-day average near $4.34.
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