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Grain market week in review - Oct. 13, 2017

WASDE report out Thursday pushes soybeans above $10 for first time since July.

Missed some market news this week? Here’s a look back.

Monday, Oct. 9

While most outside markets are on the upswing today, grain futures couldn’t hold higher at open Sunday night and are drifting lower this morning. Soybeans tried to rally through resistance on concerns about dry weather in South America but reversed lower after the market in China sold off when traders returned from a week-long holiday.

Harvest continues to be hampered with variable yields being reported, Bryce Knorr says in the Monday morning Market Update. Weather troubles are also hampering farm operations in South America.

Tuesday, Oct. 10

Corn and soybean prices headed in different directions overnight and their charts are also provide quite a contrast. Corn is struggling to hold on to support and avoid a break to new harvest lows. But soybeans are on the verge of a break out. 

Export inspection data for the week ending Oct. 5 revealed another lackluster performance in corn, a sluggish week for wheat and stronger-than-expected results in soybeans.

With plentiful rains across the Plains and the Midwest this past week – and with more in the upcoming forecast – few thought the already slow harvest in progress had much chance of catching up. Tuesday’s latest USDA Crop Progress report further validated that, showing harvest lags well behind the five-year average.

Wednesday, Oct. 11

Grain futures drifted lower overnight with the slow pace of harvest offset by improved crop ratings for corn and soybeans. Winter wheat seeding is also slow but that may be beneficial for the crop since it’s caused by good moisture levels on the central and southern Plains.

Thursday, Oct. 12

Uncertainty about the size of U.S. corn and soybean crops along with weather concerns in the southern hemisphere could generate headlines that trigger aggressive moves by computer-driven high frequency traders. Charts suggest corn and beans could be ready to break out of recent price ranges, trends funds could jump on quickly. 

USDA downsized yields in its October report by 0.4 bpa to 49.5 bpa, pushing soybean prices more than 28 cents higher immediately following the report’s release. Soybean production also came in slightly below trade estimates of 4.437 billion bushels. Globally, USDA estimates soybean production is down by around 22 million bushels. 

Friday, Oct. 13

Soybeans are trying to prove Thursday’s rally has legs, overcoming early profit taking to attract a little follow-through buying on the heels of bullish news from USDA yesterday. Corn and wheat tried to tag on to the rally in beans but couldn’t hold a rebound attempt after being on the receiving end of bearish data from the government. 

Grain futures are mixed this morning, supported by a little follow-through buying in soybeans after USDA gave the market a bullish jolt Thursday. While the government surprised traders with its production forecasts yesterday, the results were largely in line with what farmers are reporting on Feedback From The Field this week. 

Export sales were reported three times this week, with China and unknown destinations buying soybeans and Mexico buying corn. Mexico also purchased hard red winter wheat.

What were the traders up to this week? Check out a gallery of charts from Friday’s Commodity Futures Trading Commission report. Big funds were showing signs of a possible return to commodities even before big reports out during the rest of the week spurred some buying, Bryce Knorr writes.

Ben Potter recaps the week in his weekly Market Update. He talks about the WASDE report, La Nina and the Crop Progress report.

Thursday was a good day for most grain prices – especially soybeans, which saw prices rise by more than 26 cents. That positive sentiment spilled into Friday, bolstered by additional positive export news. Soybeans, corn, winter wheat and spring wheat all finished higher Friday. 

Market outlooks

Basis Outlook - Heavy rains brought relief to the river system this week, returning barge freight costs to levels where they traded before the big spike of late September and early October. But basis levels remain weaker than average despite the rebound and a relatively slow pace of harvest. 

Energy/Ethanol Outlook - The energy market is showing signs of trying to make a seasonal top. But that doesn’t mean cheap prices for 2018. While diesel could ease into winter, costs are likely to be higher on average in the year ahead. 

Fertilizer Outlook – Urea is normally the canary in the coal mine for nitrogen, leading the rest of the complex higher or lower. After a sharp rally from multi-year lows this summer urea is appearing to show signs another such turn may be near, taking prices lower. But growers still needing products now face another hurdle: problems on the river system that threaten shipments moving north.

Soybean Outlook - The soybean market is known for fast moves. But action in the first full week of October has moved at a snail’s pace, at least for beans. The slow start to harvest is one cause. History is another reason for traders to wait. All this begs the question as to what happens once the market revs up again. 

Corn Outlook - Whether opportunities to hedge 2017 production come sooner or later could be known soon. Bryce Knorr offers a rundown of what to watch – and what to do about it.

Wheat Outlook - There’s no reason to believe the wheat market has potential for big gains into 2018. But it’s not time to throw in the towel yet on either old crop in storage or new crop planned for harvest next year.

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