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Afternoon Market Recap for November 17, 2017

Grains bounce higher to end a seesaw week.

Multiple ingredients add up to a recipe for success

Sometimes the little things can add up to big changes. Friday’s grain markets took a slightly weaker U.S. Dollar, some Argentina weather worries, a bit of bargain buying and short covering, and more – add it all together for 2% gains in corn and soybean prices, with wheat prices getting a slightly more modest lift.

Precipitation is coming to the eastern half of the U.S. between Friday and Monday morning. The greatest amounts of moisture will hit the Northeast, but major grain production areas including eastern Illinois, Indiana, Ohio, Michigan and Pennsylvania could see an inch or more total accumulation. Daytime highs show a bit of variability over the weekend, from the 60s and 70s in the Central Plains all the way down into the 20s and 30s in parts of the upper Midwest.

La Niña conditions are strengthening, with surface waters in the equatorial Pacific Ocean at their coolest relative levels since 2012. Read more about how La Niña can impact winter weather in the U.S. here

The House of Representatives passed its version of the tax bill, but will the Senate be able to keep up the momentum on its end? Wall Street has its doubts, with the Dow giving back some of yesterday’s gains, falling 92 points in late morning trading to 23,332. Energy prices were up on Friday, with crude oil, diesel and gasoline prices all trading 2% or more higher. The U.S. Dollar weakened slightly, with gold prices firming moderately.

 

Corn prices fought back after a lackluster performance for much of the week. December futures added 6.5 cents in Friday’s session to close at $3.43 – virtually where it started the week ($3.4350). March 2018 futures picked up 6 cents to close at $3.55. 

Slow farmer sales less than a week ahead of the Thanksgiving holiday kept spot basis bids for both corn and soybeans steady to slightly firmer. Midwest river terminals, in particular, had prices improving 2 to 5 cents. 

Brazil’s second corn crop in Mato Grosso could take a moderate yield hit compared to 2016/17. Total production is expected at 984.2 million bushels, which is 18.75% lower than a year ago. 

A study from Ghana shows about 18% of the country’s corn falls victim to various post-harvest losses – a total of around 12.5 million bushels. The study calls for better farmer education of post-harvest handling as well as improved infrastructure for hauling grain.

Corn speculators increased their net short position this week by 27,349 contracts for a total of 264,349.

Preliminary volume estimates were a robust 671,550 contracts, nearly doubling Thursday’s total of 362,418.

 

Soybean prices climbed steadily throughout the day, buoyed primarily by continued worries over dry conditions that could impact the 2017/18 Argentine crop. January futures hit their highest levels since October 16 after surging 18.5 cents higher to close at $9.9050. March 2018 futures added a nearly identical 18.25 cents to close just north of ten dollars at $10.0150.

According to the latest estimates, 2017/18 soybean production in the Brazilian state of Mato Gross is estimated at 1.1244 billion bushels. 

Across all of Brazil, soybean plantings have reached 73%. That is in line with harvest progress of 73% a year ago and a five-year pace of 68%.

Soybean speculators switched to a net short position of 11,411 contracts this week, cutting a total of 19,349.

Preliminary volume estimates were for 178,830 contracts, up moderately from Thursday’s total of 151,140.

 

Wheat prices were helped along by strength in other grain commodities plus a slightly weaker U.S. Dollar. December Chicago SRW prices gained 5.75 cents to close at $4.2725, while December Kansas City HRW prices closed 5 cents higher, to $4.22. December MGEX Spring Wheat prices also found some traction, going up 4.75 cents to close at $6.3525.

Concern is mounting in Australia over more heavy rain in the forecast, which could damage that country’s mature winter wheat crop. 

Wheat speculators trimmed their net short position by 12,855 contracts this week, down to a total of 131.950.

Preliminary volume estimates were for 140,327 CBOT contracts, slightly lower than Thursday’s total of 145,079.

More from Farm Futures:

Corn Outlook
Soybean Outlook
Wheat Outlook

 

 

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