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Afternoon Market Recap for November 22, 2017

Grain prices gobble up pre-Thanksgiving gains.

Traders make small adjustments ahead of holiday market closures

 

Wednesday featured a quiet session, but one that handed out some higher grain prices ahead of the Thanksgiving holiday. Some concerns over La Niña’s potential impact on South American crops gave soybeans the biggest lift. Corn and wheat, meantime, ended the session with mixed results, but couldn’t move the needle very far in either direction. 

For those traveling this Thanksgiving, expect very few hang-ups due to inclement weather. The Pacific Northwest could see significant accumulation on Thursday, as could parts of central Florida and the Northeast. In the Midwest, only a small amount of snowfall is anticipated for parts of northern Minnesota. Temperatures will be brisk in parts of the upper Midwest Thursday, with daytime highs sticking to the 20s and 30s in many locations. Warmer temperatures are expected to arrive by Friday and Saturday. 

On Wall Street, it was a battle between energy stocks (up) and tech stocks (down). The Dow slipped slightly, by about 35 points in late morning trading, to 23,508. Crude oil was up by more than a dollar a barrel at that time, trading back above $57 per barrel. Other energy prices didn’t follow suit, with diesel and gasoline prices trading close to unchanged. The U.S. dollar slipped by nearly 0.5% Wednesday morning and has generally struggled to find traction throughout most of November.

Markets are closed Thursday for the Thanksgiving holiday. Be sure to tune into the next Morning Market Review first thing Friday morning for the next round of market updates and insights.

 

Corn prices caught a small lift Wednesday, as traders made some light positioning ahead of the extra day off. December futures inched forward 0.25 cents to close at $3.4525, and March 2018 futures picked up 0.75 cents to close at $3.57. 

Spot basis bids for both corn and soybeans were mostly steady or slightly higher around the Midwest Wednesday. Corn ranged from unchanged to up 4 cents, while soybeans ranged from unchanged to up 6 cents.

Ethanol production reached record highs of 1.074 million barrels per day last week – a contributing factor to lower ethanol prices, which have fallen back below $1.40. Inventories crested to 21.897 million barrels, which is 15.5% higher than a year ago. Average ethanol plant margins in the Corn Belt have remained slightly underwater since October. 

Trade estimates for the next round of USDA weekly export sales data, out Friday, range between 35.4 million and 55.1 million bushels of corn.

Grain volume that travels U.S. railways continues to decline from a week ago. Year-to-date cumulative total for 2017 surpassed 1 million railcars, to 1,021,019. That’s a weekly average of 22,196 railcars, down 2.2% from 2016. 

The latest NAFTA negotiations have made little progress, according to U.S. Trade Representative Robert Lighthizer, who said: “Absent re-balancing, we will not reach a satisfactory result.”

Farmers have been reporting quite a bit of yield variability in the latest batch of  Feedback From The Field comments. Click here to find out what everyone has reported so far.

Preliminary volume estimates were for 328,228 contracts, down substantially from Tuesday’s total of 487,094.

 

Soybean prices posted healthy gains as traders looked to signs of strengthening La Niña conditions and did some additional technical buying. January and March 2018 futures each added 8.25 cents to close at $9.9725 and $10.0850, respectively.

Australia’s weather bureau now estimates the chances of La Niña at 70%, with the potential to peak in December and last at least through February. Some past La Niña events led to drought in some key production regions in Brazil and Argentina (the latter of which is already dealing with some dry conditions). 

Canada canola futures were also higher Wednesday, in response to stronger soybean prices. 

Trade estimates for the next round of USDA weekly export sales data range between 36.7 million and 55.1 million bushels of soybeans. 

Preliminary volume estimates were for 145,970 contracts, up moderately from Tuesday’s total of 103,807.

 

Wheat prices finished the day mixed, with Chicago SRW and MGEX Spring Wheat prices down slightly, and Kansas City HRW prices up slightly. December Chicago SRW futures lost 2 cents to close at $4.2275, and December Kansas City HRW futures picked up 0.75 cents to close at $4.21. December MGEX Spring Wheat prices edged down 0.25 cents to close at $6.2725. 

Spot basis bids for hard red winter wheat held steady at most locations but rose at an elevator located in Enid, Okla. Total volume was slim ahead of the Thanksgiving holiday.

Trade estimates for the next round of USDA weekly export sales data range between 12.9 million and 20.2 million bushels of wheat.

Preliminary volume estimates were for 173,336 CBOT contracts, up moderately from Tuesday’s total of 144,656.

 

More from Farm Futures:

Corn Outlook
Soybean Outlook
Wheat Outlook

 

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