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Afternoon Market Recap for June 23, 2017

Corn at six-week low, soybeans flat.

June 23, 2017

Spring wheat sets more contract highs, winter wheat slips

Corn added to recent losses by closing lower on Friday as forecasts for mild, wet conditions next week provided some comfort that the crop’s pollination will not be hurt.

Soybeans closed about unchanged for day, but lower for the week, on position squaring ahead of the weekend. The July remains near the 14-month low set on Thursday. 

Forecasts have rain this week for much of the Midwest with storms spawned by Tropical Storm Cindy moving through the Midwest today, but exiting the area by Saturday. The 6- to 10-day outlook (June 28-July 2) is cool and wet for the Midwest and the northern Plains

Equities were about unchanged, with the Dow industrials down 0.7 point when the crops closed. The dollar was lower, while crude oil and gold were higher.

Exports – USDA, Reuters:

  • Bangladesh is in the market for 50,000 metric tons of wheat. The tender closes July 11, with shipment 40 days after deals are signed.

 

Corn closed about 5 cents lower and was lower for the week, with July and December under key moving averages and RSI’s under 40 on technical charts. 

The seven-day and 6- to 10-day outlooks favor widespread beneficial rain for the Midwest with total amounts of an inch or more in northern Illinois and more than 2 inches in parts of Iowa and Kansas.

Also, the cooler weather should aid early-planted corn that will be entering its pollination period. 

The CBOT estimated Friday’s volume at 571,873. Thursday’s actual volume was 441,504. Open interest in Thursday’s lower market increased by 11,468 with July’s down 14,075 and December’s up 14,271.

July corn closed down 5 at $3.57-3/4 and new-crop December down 5-1/2 at $3.75-1/4.

What to Look For: Attention will be on the Midwest storms the next few days. Farm Futures expects next week’s planting report to keep corn acreage near USDA’s current 90 million estimate and June 1 stocks at 5.095 billion versus USDA’s year ago number of 4.72 billion.

 

Soybeans closed about unchanged to remain near their lowest since April 2016 as forecasts for the mild, wet weather next week tempered buying. 

Traders added short positions the last few days, evidenced by increased open interest following the lower markets. CFTC last week said funds reduced their net short position in soybeans by more than 18,000 contracts as of last Tuesday, but funds appear to have changed that course this week.

The CBOT estimated Friday’s volume at 303,638. Thursday’s actual volume was 329,103. Thursday’s open interest in the lower market increased by 12,170 with July’s down 11,726 and November up 8,219.

July soybeans closed up ½ at $9.04-1/2 and August was unchanged at $9.08-1/2. New-crop November slipped 2-1/4 to $9.11.

What to Look For – Rain amounts and breadth of coverage the next few days will be at the forefront of traders’ minds. Farm Futures expects next week’s planting report to show a few more soybean acres than what USDA’s current 89.48 million. It expects June 1 stocks at 986 million versus the 870 million a year ago.

 

Winter wheat markets closed lower for the day and week, while spring wheat set contract highs and closed higher for the week.

Spring wheat found its legs late in the week after being down earlier in the period. The gains came amid worries about the crop’s condition in the northern Plains and export demand. Going forward the seven-day forecast has light showers there of less than an inch total there.

Harvest is under way for winter wheat and harvesters in Kansas report a wide range of yields. They also report fewer wheat acres there this year.

Wire reports say hot conditions in France, Spain and eastern Europe have raised concerns for wheat and others crops there.

The CBOT estimated Friday’s SRW volume at 136,669. Thursday’s actual volume was 162,141. Open interest in Thursday’s lower SRW market decreased by 3,096 with July’s down 12,956 and September’s up 7,597.

Chicago’s July SRW wheat closed down 1-1/2 at $4.59-3/4 and September down 1-3/4 at $4.73-1/24. Kansas City’s July hard red winter wheat dropped 3-1/2 at $4.64-1/4 and September dropped 3-1/4 to $4.82-1/2. Spring wheat for July rose 5 to $6.61-1/4 and September rose 5 to $6.66-1/4.

What to Look For – The harvest has moved into Kansas and yield but rain and immature wheat has slowed progress. Farm Futures expects USDA’s stocks report next Friday to show about 1.164 billion bushels of wheat as of June 1 versus 981 million a year ago. 

More from Farm Futures:

Weekly Corn Review
Weekly Soybean Review
Weekly Wheat Review

 

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