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Afternoon Market Recap for September 22, 2017

Corn, soybeans grab gains to end the week.

Wheat prices offer mixed results to close out Friday

Corn and soybean prices barely nudged higher after a choppy day of trading on Thursday, but on Friday, they grabbed moderate gains early in the day and never looked back. Meantime, winter wheat prices gave back most of yesterday’s gains while spring wheat held on for a second straight day of higher prices.

Meteorological fall began September 1; astronomical fall begins today. Summerlike weather conditions still prevail across much of the Midwest. Cooler weather is expected to bring some moderate changes to the region next week, however. (In Missouri, for example, the daytime high for next Friday will be more than 20 degrees cooler than it is today). Current projections for Hurricane Maria, which has caused massive damage in Puerto Rico, do not have the storm making a U.S. landfall, although it could bring rain and wind to some East Coast areas.

The name-calling continues between President Donald Trump and North Korean leader Kim Jong Un, who called Trump ‘deranged’ and has pledged to conduct hydrogen bomb testing over the Pacific Ocean in the near future. OPEC claims it is winning the war on a global oil glut, noting that prices have risen about 15% over the past three months. Crude oil has been trading back above $50 per barrel this week for the first time since late July. Wall St. wavered on Friday, with the Dow dropping another 49 points in mid-afternoon trading and is back down below 22,300 points.

 

Corn prices, buoyed by good news in other grains and supported by chart-based buying, saw modest gains on Friday. December 2017 prices added 3.25 cents to close at $3.5350, while March 2018 prices added 3 cents to close at $3.66.

A World Trade Organization (WTO) dispute panel has been established so it can rule on a complaint the U.S. levied against China regarding its import quotas on corn and other agricultural commodities. Another 14 countries (including Australia, Brazil, Canada, Japan, the EU and others) have joined the dispute as third parties.

The U.S. continues its ethanol production binge. Total production potential in 2017 is between 16.3 and 16.4 billion gallons – well above 2016’s total of 15.2 billion gallons. Ethanol exports were up 30% from January to July, with 803 million gallons (compared to 1.17 billion gallons for all of 2016). Even so, recent tariffs added by China and Brazil could slow that pace. 

Preliminary volume estimates were higher than Thursday’s total of 148,075 contracts, with 178,653.

 

Soybean prices finished the week strong, up double digits to a six-week high after news of strong export sales continues to come in. November 2017 and January 2018 prices both gained 13.5 cents, finishing the week at $9.8425 and $9.9450, respectively. 

Private exporters reported yet another large sale to USDA on Friday – the ninth in the past two weeks. Today’s sale was for 6.98 million bushels of soybeans to be delivered to Mexico in the 2017/18 marketing year, which began September 1.

Brazilian farmers have had clearance to plant their 2017/18 crop since September 11, but many are waiting on much-needed rains before they get started. In the past decade, total soybean acreage in Brazil has grown by 60%.

Preliminary volume estimates were significantly higher than Thursday, with 226,733 contracts.

 

Wheat prices lost all of Thursday’s winter wheat gains and then some from profit-taking in the wake of yesterday’s one-month highs. December Chicago SRW futures fell 3 cents to close at $4.4950, and December Kansas City HRW futures slipped just 0.25 cents to close at $4.4925. December MGEX Spring Wheat, on the other hand, kept up its current momentum by adding another 10.5 cents to close at $6.3550.

Some dispute lingers over the size of Russia’s total 2017 grain crop. Russia’s Agriculture Ministry pegs clean weight grain production at 4.04 billion bushels, but unofficial analyst estimates have come in significantly higher, at 4.89 billion bushels. There are also some reports of delayed winter grain plantings in Russia due to rainy weather in some key production regions.

Preliminary volume estimates were down slightly from Thursday’s totals, with 79,219 contracts.

More from Farm Futures:

Corn Outlook
Soybean Outlook
Wheat Outlook

 

 

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