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Afternoon Market Recap for Sept. 19, 2018

Corn, wheat follow soybeans higher.

Soybean futures find technical bounce after multiyear lows earlier this week

Wednesday grain futures gain some green, after soybean futures deliver a technical bounce following losses earlier this week, and after wheat prices continue to firm on global supply concerns, with corn picking up some spillover strength. Soybeans and winter wheat futures finished the day with double-digit gains.

Heavy rains are making their way across parts of Iowa and Northern Illinois today, with more Midwestern rain in the forecast. The latest seven-day cumulative precipitation map from NOAA calls for 1” of rain or more expected across most of the central U.S. between now and September 26. Seasonally warm weather for the rest of this week should give way to below-average temperatures starting this weekend into early next week.

Hot financial stocks helped the Dow to another day of big gains Wednesday, picking up another 181 points in afternoon trading to 26,428. Energy futures also moved higher, anchored by nearly 2% gains for crude oil, which moved back above $71 per barrel. Diesel and gasoline futures found more modest gains. The U.S. Dollar softened fractionally.

 

Corn prices caught some spillover strength from surging soybean and wheat prices, with December and March futures ending Wednesday’s session up 2.5 cents apiece to close at $3.4575 and $3.58, respectively. The large looming U.S. harvest kept a low ceiling on gains.

Harvest pressure also suppressed corn basis bids, which trended 2 to 5 cents lower across multiple Midwestern locations Wednesday. 

Ahead of Thursday morning’s USDA weekly export report, analysts anticipate the agency will report corn sales ranging between 19.7 million and 47.2 million bushels for the week ending September 13. 

Grain lobby Coceral lowered its estimates for 2018 EU corn production by 2.3% since June, to 2.319 billion bushels after hot, dry conditions persisted through much of the continent throughout the summer. 

Since July, Ukraine’s corn exports have reached 55 million bushels, with total grain exports down 9.4% versus the same time a year ago. 

South Korea purchased another 2.4 million bushels of corn from optional origins (likely sourced from the U.S.) in an international tender, for shipment in November or December.

Grain traveling U.S. railways continues to surpass the pace of 2017 with cumulative carloads of 852,231 carloads so far this year, which is 4.4% ahead of the same time a year ago.

Preliminary volume estimates were for 195,185 contracts, falling significantly from Tuesday’s final count of 318,429.

 

Soybean prices gained a technical bounce after prices slumped to multiyear lows Monday and Tuesday. Prices moved around 2% higher Wednesday, with November futures gaining 16 cents to $8.30, while January futures were up 15.75 cents to $8.4375.

With harvest of a potentially record-breaking 2018 U.S. crop now underway, soybean basis bids dropped 2 to 5 cents across several Midwestern locations Wednesday.

Ahead of Thursday morning’s USDA weekly export report, analysts anticipate the agency will report soybean sales ranging between 14.7 million and 33.1 million bushels for the week ending September 13.

Analysts expect USDA to report an additional 50,000 to 350,000 metric tons of soymeal sales, plus another 30,000 MT of soyoil sales last week.

Statistics Canada expects the country’s 2018 canola production to ease 1.5% lower year-over-year, reaching 925.9 million bushels.

Chinese tariffs, a historically large U.S. crop – is there any bullish news out there for soybeans? Read Farm Futures senior grain market analyst Bryce Knorr’s latest Soybean Outlookto learn more. 

Preliminary volume estimates were for 98,948 contracts, dipping below Tuesday’s final tally of 139,896.

 

Wheat prices tilted higher on possible tightening global stocks, a round of technical buying and a recent burst of export activity. As a result, some contracts gained 2% or better in Wednesday’s session. December Chicago SRW futures rose 12 cents to $5.2250, December Kansas City HRW futures added 10.25 cents to $5.2625, and December MGEX spring wheat futures gained 7.75 cents to $5.8625.

Ahead of Thursday morning’s USDA weekly export report, analysts anticipate the agency will report wheat sales ranging between 9.2 million and 18.4 million bushels for the week ending September 13.

EU grain lobby Coceral lowered its 2018 soft wheat production estimates from 5.1 billion bushels in June down to 4.8 billion bushels in its latest assessment. 

The latest Statistics Canada survey pegs the country’s 2018 wheat production at 3.5% higher than a year ago, reaching 1.140 billion bushels. In particular, the country’s durum production this year is expected to spike 15% above 2017, reaching 209.8 million bushels.

Ukraine’s wheat exports for 2018/19 have totaled 158 million bushels so far, plus additional barley exports totaling 82.7 million bushels.

Syria purchased 7.3 million bushels of wheat from Russia in an international tender that closed earlier this week, for shipment as early as mid-October.

Jordan made no purchases in its tender for 4.4 million bushels of milling wheat, but the country will likely reissue it with a new closing date of September 27. 

China sold 110,000 bushels of its 2013 state reserves of what at auction Wednesday, which was 0.3% of the total available for sale. The country has made a flurry of similar sales in recent weeks. 

Preliminary volume estimates were for 69,247 CBOT contracts, slipping below Tuesday’s final count of 83,374.

 

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