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Afternoon Market Recap for July 19, 2018

Mixed bag lifts grain prices.

Corn, soybeans and wheat all fight for moderate gains Thursday

Whether it was due to export demand, weather or just good old-fashioned technical maneuvering, grain prices moved higher Thursday due to a variety of factors. Wheat futures found the biggest lift, gaining more than 1.5%, but corn and soybean futures also moved moderately higher Thursday.

Relatively cooler weather has descended across much of the central U.S. and will stay there at least the middle of next week, with daytime highs clocking in slightly to moderately below normal.  The latest 5-day cumulative precipitation map from NOAA shows bountiful rainfall probable for most areas east of the Mississippi River between today and July 24.

Weaker corporate earnings and a stronger dollar weighed down Wall St. Thursday, with the Dow dropping around 80 points this afternoon to 25,120. Market eyes are also on President Trump, who earlier Thursday criticized the Federal Reserve for its recent spate of interest rate hikes, indicating he’s ‘not thrilled’ about these moves. The Fed is still likely on pace to make four total interest rate hikes in 2018.

Energy prices were mixed Thursday, with crude oil trending about 1% higher, as gasoline and diesel futures took more modest cuts. Safe-haven gold found modest traction today but has trended downward for much of June and July.

 

Corn prices pushed about 1% higher after Thursday’s USDA export report exceeded analyst expectations, protecting those gains for the rest of the session. September and December futures each added 4 cents to close at $3.5125 and $3.65, respectively.

Corn basis bids were mixed Thursday, firming 2 to 3 cents at several river terminals and ethanol plants but down 5 cents at an Ohio elevator, signaling uneven supplies and demand across the Midwest amid generally slower farmer sales.

Corn saw old crop sales up 59% from the prior week, at 25.2 million bushels, plus another 30.5 million bushels of new crop sales for a total of 45.7 million bushels. That exceeded the range of trade estimates for last week, which topped out at 43.3 million bushels.

Corn export shipments reached 50.9 million bushels, which was down 7% from the prior week and 16% off the four-week average. Mexico was the No. 1 destination.

USDA also reported Thursday that its export sales totals for corn and wheat to Argentina were incorrect. The agency did not offer details but indicated the error would be corrected in its July 26 export report.

The EPA reports that the U.S. generated 1.26 billion ethanol blending credits in June, down slightly from 1.30 billion in May.

In the latest Energy/Ethanol Outlook from Farm Futures senior grain market analyst Bryce Knorr, find out how much fall diesel he recommends booking now, “unless you’re comfortable gambling on further reductions or want to get all your needs covered.”

China sold 43.7 million bushels of its state reserves of corn at auction Thursday, which was 27.7% of the total available for sale.

Preliminary volume estimates were for 217,461 contracts, inching slightly higher than Wednesday’s final count of 215,049.

 

Soybean prices endured a wobbly session but one that ultimately moved higher throughout the day on a round of technical buying. August futures finished 3.75 cents higher to $8.46, while September futures gained 4 cents to $8.52. Higher prices extended into a fourth consecutive session after dropping to multiyear lows late last week. 

Soybean basis bids were largely unchanged Thursday but did jump 9 cents higher at an Ohio river terminal to drum up additional sales there.

Soybeans found 9.3 million bushels in old crop sales and another 22.5 million bushels in new crop sales for a total of 31.8 million bushels. Totals last week ended up on the high end of trade estimates, which ranged from 11.0 million bushels to 36.7 million bushels.

Soybean export shipments reached 22.2 million bushels, which came in 18% below the prior week and 22% below the four-week average. Mexico was the No. 1 destination.

EPA reports that the U.S. generated 317 million biodiesel blending credits in June, down moderately from the 350 million credits generated in May.

Preliminary volume estimates were for 108,801 contracts, pushing slightly below Wednesday’s final count of 109,744.

 

Wheat prices found some buoyancy Thursday on solid export data from USDA, with an additional assist from some lingering production concerns overseas. Chicago SRW contracts found the biggest lift, with September futures adding 9.75 cents to $5.0425. September Kansas City HRW contracts didn’t push back over $5, but still gained another 7.75 cents to close at $4.9550. And September MGEX spring wheat prices rose 8.75 cents to reach $5.3725.

Wheat export sales found 11.0 million bushels in new crop sales – up noticeably from dismal totals the prior week but still down 25% below the four-week average. That total landed in the middle of trade estimates, which ranged between 5.5 million and 18.4 million bushels. 

Wheat export shipments topped 15.9 million bushels last week – a new best for the young 2018/19 marketing year, coming in 19% over the four-week average. The Philippines topped the destination list, with 4.5 million bushels.

Japan purchased 2.1 million bushels of food-quality wheat from the U.S. in a regular tender that closed Thursday. The purchase included western white, dark northern spring and hard red winter wheat. 

A common occurrence in recent weeks, Jordan made no purchases in its international tender for 4.4 million bushels of milling wheat that closed Thursday. The country has seen limited participation in its tenders this year. 

Preliminary volume estimates were for 72,380 CBOT contracts, dropping 18% below Wednesday’s final count of 88,326.

 

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

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