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Afternoon Market Recap for Aug. 17, 2018

Last-minute rally saves soybeans.

Wheat find a significant boost Friday, with corn down fractionally

Soybean prices languished lower for most of Friday, but news this afternoon that the U.S. and China hopes to sew up their current trade dispute by November gave futures a last-minute rally that helped them finish slightly higher. The news also helped corn prices pull nearly even in the session, and wheat took commanding gains on separate export reports coming out of Russia. 

Near or slightly above-normal temperatures through the weekend will give way to seasonally cool weather across much of the Midwest and Plains early next week. Most of the central U.S. will get at least 1” of additional rainfall over the next seven days, with the eastern Corn Belt potentially seeing 2” or more additional accumulation through August 24.

U.S. consumer sentiment reached an 11-month low, but Wall St. was more optimistic Friday as trade talks with China could resume later in August. The Dow was up more than 150 points in afternoon trading to 25,715. Energy futures also rebounded, with crude oil, diesel and gasoline futures all up modestly Friday afternoon. The U.S. Dollar retreated moderately after hitting 13-month highs earlier this week.

Did you know 26 states must still abide by WOTUS regulations after a ruling earlier this week from a South Carolina federal judge? Catch up on the details in Farm Futures’ latest DC Dialogue column.

 

Corn prices eased on a round of technical selling, with September and December futures slipping a penny each to close at $3.6425 and $3.7875, respectively. 

Corn basis bids trended 1 to 3 cents higher at river terminals and processors, remained steady across Midwestern ethanol plants and dipped 2 cents lower at an Ohio elevator Friday. 

French consultancy FranceAgriMer again lowered its assessment of the country’s 2018 corn crop, moving it from 62% in good-to-excellent condition the week prior to 61% as of August 13. Hot, dry weather has moved the country’s corn quality ratings 10 points lower over the past three weeks. 

China sold another 33.5 million bushels of its state reserves of corn Friday, which was 21.5% of the total available for sale.

For the week, corn speculators added 5,526 contracts to their net short position to reach 47,384. 

Preliminary volume estimates were for 260,872 contracts, moving moderately ahead of Thursday’s final count of 208,133.

 

Soybean prices slumped for most of Friday’s session but captured small gains by the close on reporting from the Wall St. Journal that the U.S. and China seek to resolve their trade dispute by November. September futures finished 1 cent higher at $8.8650, with November futures adding 0.75 cents to $8.9775.

Soybean basis bids were down 1 to 5 cents across several Midwestern locations Friday but did move 6 cents higher at an Illinois river terminal.

For the week, soybean speculators added another 9,509 contracts to their net short position, which reached 103,916. 

Preliminary volume estimates were for 152,793 contracts, shifting moderately below Thursday’s final count of 227,772.

 

Wheat prices moved significantly higher Friday after markets absorbed some speculation about Russian exports this coming year. September Chicago SRW futures added 18.25 cents to $5.6050, September Kansas City HRW futures gained 16.75 cents to $5.6425, and September MGEX spring wheat futures rose 12.25 cents to get back over $6 per bushel for the first time this week. 

Russia could see wheat exports for its 2018/19 marketing year reach 1.286 billion bushels, according to the country’s agriculture ministry. Russia is the world’s No. 1 wheat exporter. However, futures prices climbed in Europe and the U.S. on rumors that Russia may consider curbing grain exports after they top 1.102 billion bushels.

Wheat prices also gained traction on the latest weather forecasts coming out of Australia, which call for drier weather in September.

Analysts in Europe, meantime, expect smaller overall wheat crops throughout the EU but no major sacrifices in crop quality. Lower yields are anticipated in Germany, France, the UK, Poland and elsewhere in the region.

Ukraine’s wheat harvest nears completion, with a total production of 914.9 million bushels on average yields of 56.4 bpa, according to the country’s agriculture ministry. 

With domestic production deficits expected, Kenya anticipates it will import around 110 million bushels of wheat during the next two years. The country currently produces a little less than 15 million bushels of wheat annually.

For the week, CBOT wheat speculators raised their net long position by another 3,203 contracts to reach a total of 14,220.

Preliminary volume estimates were for 195,464 CBOT contracts, moving moderately ahead of Thursday’s final count of 139,588.

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