July 21, 2017
Corn, soybeans higher for the week
End of the week selling took crop markets lower as forecasts put a little more rain in the Midwest the next few days and the forecast for next week favors rain.
The corn and soybeans still finished higher for the week following gains the previous days related to fund buying and the latest U.S. Drought Monitor that expanded the area of moderate drought into the western Midwest and central Plains.
In addition, the National Weather Service’s 30-day outlook favors above-normal temperatures in August for most of the country.
The latest 6- to 10-day (July 26-30) outlook has hot but wet conditions for much the Midwest and hot and normal rainfall chances for the northern Plains. The 8- to 14-day (July 28-August 3) outlook has hot and dry conditions then for the Plains and western Midwest.
The dollar tumbled to its lowest in more than a year following more gains in the euro as the European Central Bank hinted this week it may tighten the money supply beginning this fall.
Equities were a little lower with the Dow Jones industrials down about 41 points when the crops closed. Gold was up $6.30 an ounce and crude oil was down $1.21 a barrel.
Exports – USDA, Reuters:
- Jordan retendered for 100,000 metric tons of wheat after not making a purchase in its previous tender. The current tender closes on July 26.
- Iraq tenders to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes on July 31, with offers remaining valid until August 6.
- Bangladesh issued a new tender to buy 50,000 metric tons of wheat. The tender closes July 26.
Corn closed about 11 cents lower to wipe out the previous day’s gains, but still finished higher for the week. New-crop December came to rest just above chart support at the 20-day moving average with an RSI of 49.6.
The 2.7% drop in December corn was the largest daily drop in a week.
Much of the late week drop was linked to the forecasts that have more rain for the Midwest and the northern Plains. Those same forecasts keep hot weather in the growing regions at a time when much of the corn is pollinating.
The CBOT estimated Friday’s volume at 387,198. Thursday’s actual volume was 407,029. Open interest in Thursday’s higher market decreased by 2,147 with September’s down 10,419 and December’s down 2,125.
September corn closed down 11-1/4 at $3.79-3/4 and new-crop December dropped 11-1/4 to $3.93-1/2.
What to Look For: Weather remains supportive with hot conditions expected this week and next week. Crop conditions will be updated on Monday. As of last Sunday, corn was rated 64% good/excellent.
Soybeans closed a few cents lower but remained higher for the week with new-crop contracts staying well above $10.
August soybean futures remained above key moving averages with an RSI of 62 on charts. November also stayed above key moving averages with an RSI near 63
The CBOT estimated Friday’s volume at 213,193. Thursday’s actual volume was 214,565. Thursday’s open interest in the higher market increased by 4,955 with August’s down 5,734 and November’s up 2,808.
August closed down 4-1/4 at $10.09 and new-crop November down 4-3/4 at 10.22-1/4.
What to Look For – Soybeans are developing about on schedule with 52% at the blooming stage versus the 51% average. Crop conditions will be updated on Monday. Earlier this week the crop was rated 61% good/excellent.
The three wheat markets were followers and closed lower for the day. Spring wheat were higher for the week as concerns remain about that crop.
Spring wheat contracts remain above key moving averages with September’s RSI at 61. Harvest in the Dakotas is about two weeks away. September SRW and HRW contracts stayed under the 20-day averages but above other averages.
The winter wheat harvest is about finished leaving it largely immune to further weather problems. Europe’s harvest is under way and rain has slowed progress in Germany and raised concerns for that crop. Early reports indicate better-than-expected results from the French harvest.
The CBOT estimated Friday’s SRW volume at 119,352. Thursday’s actual volume was 115,787. Open interest in Thursday’s firm SRW market decreased by 2,426 with September’s down 368 and December’s down 342. KC HRW wheat actual volume on Thursday decreased to 39,418 with open interest up 1,086.
Chicago’s September SRW wheat closed down 6-1/2 at $4.99-1/4. Kansas City’s September HRW dropped 7-3/4 to $4.96. Spring wheat for September dropped 12-1/4 to $7.65-3/4.
What to Look For – Weather will be key as spring wheat heads into next month’s harvest.
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