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Afternoon Market Recap for Oct. 12, 2018

Corn, soybeans extend gains.

Wheat prices also up substantially to close a seesaw week

Corn and soybean prices continued to trade on bullish USDA production and supply data Friday, with both grains capturing gains just above 1%. Wheat prices also trended substantially higher on some short-covering, with some contracts trading as much as 2% higher.

Weather across the central U.S. should continue to come in sharply cooler through the weekend and into next week, with daytime highs trending 10 degrees or more colder-than-normal for the next several days. Some rain is also in the latest five-day forecasts, with the lower Midwest and Mid-South likely to receive the greatest precipitation amounts through October 17. 

Wall St.’s selloff earlier this week stalled Friday on a technical bounce, with the Dow up 11 points in afternoon trading to 25,064. Energy futures turned in mixed results, however, with crude oil and gasoline up moderately, while diesel posted modest losses Friday afternoon. The U.S. Dollar firmed slightly.

 

Corn prices captured big gains on yesterday’s bullish USDA World Agricultural Supply and Demand Estimates (WASDE) data, and traders extended that rally on Friday, pushing prices another 1% higher. December and March futures each gained 4.5 cents to close at $3.7375 and $3.8575, respectively.

Corn basis bids were mixed but mostly lower Friday, dropping as much as 11 cents at an Ohio elevator but trending 1 to 3 cents higher across several other Midwestern locations.

Corn saw 39.6 million bushels in export sales for the week ending October 4, which was down moderately from the prior week’s total of 56.3 million bushels and trade expectations of 49.2 million bushels.

Corn export shipments of 63.2 million bushels last week still stayed well ahead of USDA forecasts. For the 2018/19 marketing year, which began September 1, Mexico is the leading destination for U.S. corn export commitments, with 31% of the total.

Consultancy Strategie Grains raised its latest 2018 European Union corn production estimates Friday to 2.338 billion bushels, as it cited bigger yields in southeast Europe more than offsetting drought-stressed crops further west.

France’s 2018 corn harvest has reached 65% as of October 8, up from 42% the week prior and well ahead of 2017’s pace of 24% at the same time last year, according to consultancy FranceAgriMer.

China sold 25.9 million bushels of its state reserves of corn at auction Friday, which was 16.4% of the total available for sale.

For the week, corn speculators cut their net short position by 14,605 contracts to reach 80,680.

Preliminary volume estimates were for 278,338 contracts, dropping more than 28% from Thursday’s final count of 389,842.

 

Soybean prices also added to gains captured yesterday from supportive WASDE data. November and January futures each picked up another 9.25 cents to close at $8.6750 and $8.8175, respectively.

Soybean basis bids were mostly steady today, coming in slightly mixed at river terminals Friday, with prices falling an anomalous 10 cents at an Ohio elevator. 

Farmers providing the latest updates to Feedback from the Field are reporting average soybean yields of 52.4 bushels per acre, slightly below USDA’s latest estimates. Click hereto view the interactive map and see how yields are stacking up in your area.

Soybean exports found 16.2 million bushels in old crop sales and another 200,000 bushels in new crop sales, for a total of 16.3 million bushels. That number came in significantly below the prior week’s tally of 56.1 million bushels and was less than half of trade estimates of 38.6 million bushels.

Soybean export shipments totaled 32.5 million bushels last week. For the 2018/19 marketing year, which began September 1, unknown destinations represented the top destination for U.S. soybean export commitments, accounting for 40% of the total. 

Ahead of the National Oilseed Processors Association next monthly report, out Monday morning, analysts expect a September soybean crush totaling 157.406 million bushels, which would exceed the prior September record by 17.5 million bushels and surpass year-over-year results by more than 15%.

China imported 294.3 million bushels of soybeans in September, down 12.4% from August totals. The country’s vegetable oil imports reached 582,000 metric tons, down 1.4% month-over-month. The world’s No. 1 soybean importer, China’s 2018 totals have reached 2.572 billion bushels. 

For the week, soybean speculators increased their net short position by another 1,462 contracts to reach 101,742. 

Preliminary volume estimates were for 112,726 contracts, falling significantly from Thursday’s final count of 276,715.

 

Wheat prices found a generous technical bounce Friday on a round of short-covering following moderate losses posted earlier this week, with some contracts trending as much as 2% higher. December Chicago SRW futures added 9.25 cents to $5.1725, December Kansas City HRW futures gained 10.25 cents to $5.24, and December MGEX spring wheat futures added 6.5 cents to $5.9425.

Wheat exports found 12.5 million bushels in total sales last week, moving moderately below the prior week’s tally of 16.0 million bushels and trade estimates of 16.5 million bushels. 

Wheat export shipments reached 18.5 million bushels last week. Since the 2018/19 marketing year began June 1, the Philippines continue to be the leading destination for U.S. wheat export commitments, accounting for 15% of the total.

Strategie Grains raised its 2018 EU soft wheat production estimates to reach 4.666 billion bushels, an increase of 73 million bushels from September estimates but still down 10% from 2017 totals. The consultancy estimates EU’s 2018/19 soft wheat exports will reach 712.8 million bushels, down 5.4% year-over-year.

French consultancy FranceAgriMer estimates soft wheat planting progress for the country’s 2018/19 crop has reached 15% complete as of October 8, up from 5% a week ago. 

For the week, wheat speculators increased their net short position by another 1,517 contracts to reach 43,396.

Preliminary volume estimates were for 70,906 CBOT contracts, slipping moderately below Thursday’s final count of 107,718.

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