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Afternoon Market Recap for July 13, 2018

WASDE’s wheat rally stretches into Friday.

Corn and soybean gains from Thursday vanish a day later, meantime

The latest USDA World Agricultural Supply and Demand Estimates (WASDE) report, out Thursday, handed out double digit gains in some wheat contracts, plus some more modest boosts for corn and soybean futures yesterday. Wheat prices extended that rally into Friday, but corn and soybean prices reversed lower due to overriding trade and weather worries.

Daytime highs will remain seasonally above-average for the next several days – especially in the lower Midwest and Southern Plains – before giving way to more moderate temperatures by the middle of next week. The latest 7-day cumulative precipitation maps from NOAA shows another 1” to 2” or more rainfall possible in large portions of Kansas, Nebraska, Missouri, Iowa, Wisconsin, Illinois, Indiana and Ohio through July 20.

On Wall St., gains from industrial and energy stocks overshadowed poorly performing financial stocks, sending the Dow up another 101 points in early afternoon trading to 25,026. Aside from slumping natural gas prices, energy futures also trended moderately higher Friday. The U.S. Dollar softened slightly.

 

Corn prices enjoyed moderate gains Thursday from helpful WASDE data but handed them right back on Friday as markets returned to worrying about trade relations with China and promising weather forecasts as this year’s crop heads quickly into pollination. July futures dropped 6.25 cents to $3.3025, while September futures fell 4.5 cents to $3.4125. 

For the week, September corn futures are down almost 5.3%. Also for the week, corn speculators increased their net short position by 37,460 contracts for a new total of 73,267.

Corn basis bids were mixed Friday, trending as much as 3 cents lower and 4 cents higher, due to uneven supply and demand across the Midwest.

South Korea has purchased another 2.7 million bushels of corn from optional origins Thursday, bringing the country’s total purchases in June and July to nearly 79 million bushels after capitalizing on generally lower prices.

Taiwan purchased 2.6 million bushels in an international tender Friday that can sourced from the U.S. or Brazil. The grain is for shipment between late September and early October.

Brazil consultancy Safras & Mercado estimates the country’s summer corn crop for 2018/19 will feature 1.6% fewer acres, primarily at the expense of Brazilian farmers opting to plant more soybean and cotton acres this coming season. 

French consultancy FranceAgriMer estimates 73% of the country’s current corn crop is in good-to-excellent condition as of July 9, down from 74% the prior week. 

China sold another 37.1 million bushels of its state reserves of corn at auction Friday, which was about 23.5% of the total available for sale. 

The newest podcast from Farm Futures – Deep Dive – covers USDA export data in the latest episode. Click here to listenand to access links to the first three episodes. New episodes will debut each week. 

Preliminary volume estimates were for 262,481 contracts, down 38% from Thursday’s final count of 425,591.

 

Soybean prices took one small step forward Thursday and one big step back Friday as grain markets renewed worries about the ongoing U.S.-China trade spat. July futures tumbled 16 cents to $8.14, while August futures fell 15 cents to $8.1875.

For the week, August soybean futures were down another 6.6%. Also for the week, soybean speculators cut their net position by 5,497 contracts for a total of 72,351.

Soybean basis bids were steady to lower Friday, amid generally lower demand. Prices dropped between 4 and 8 cents at some Midwestern locations.

The next report from the National Oilseed Processors Association (NOPA), out next Monday morning, could reveal the largest June U.S. soybean crush on record. Analysts estimate a total crush of around 159.637 million bushels – 15.6% ahead of 2017 and likely to best the previous June record (set in 2016) by a full 10%. 

Chinese customs data showed the country imported 319.7 million bushels of soybeans in June, down around 10.1% from its May soybean imports. Vegetable oil imports were also down 11.8% from May.

A Brazilian consultancy predicts the country’s farmers will plant a record 88.96 million acres of soybeans in 2018/19. If realized, the total will exceed 2017/18 acres by 2.3%, according to Safras & Mercado.

Preliminary volume estimates were for 147,802 contracts, down more than 22% from Thursday’s final count of 190,177.

 

Wheat prices were boosted by yesterday’s WASDE report, which reinforced possible production concerns in some key overseas markets. The mini-rally extended into Friday, with some winter wheat contracts gaining double digits. September Chicago SRW prices were up 12.5 cents to $4.97, and September Kansas City HRW prices were up 10.25 cents to $4.9150. Spring wheat contracts found more modest gains, with September MGEX prices up just 1.75 cents to $5.2950. 

Losses incurred through Wednesday, however, still left prices trending lower for the week, including: 

  • September Chicago SRW – down another 3.2%
  • September Kansas City HRW – down another 3.8%
  • September MGEX spring wheat – down another 5.2%

Also for the week, CBOT wheat speculators increased their net short position by another 249 contracts for a total of 24,693.

Russia’s Agriculture Ministry is expecting a 2018 wheat production totaling 2.366 billion bushels. 

France’s 2018 soft wheat harvest reached 20% completion as of July 9 (up from 3% the prior week). The country’s current soft wheat crop is in 72% good-to-excellent condition according to consultancy FranceAgriMer, down from 73% the prior week.

Preliminary volume estimates were for 147,802 CBOT contracts, up almost 20% from Thursday’s final count of 123,272.

 

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

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