Ag Markets Drop Slightly Wednesday

(Agriculture.com) – On Wednesday, the CME Group’s farm markets trade lower.

In early trading, December corn futures are 1¼¢ lower at $3.66¾; March corn futures are 1¼¢ lower at $3.78.

November soybean futures are 3¾¢ lower at $8.90; January soybean futures are 3¾¢ lower at $9.03.

December wheat futures are ½¢ lower at $4.83¾.

December soy meal futures are $1.40 per short ton lower at $296.40. December soy oil futures are 0.03¢ lower at 29.96¢ per pound.

In the outside markets, the NYMEX crude oil market is $1 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 22 points lower.

Al Kluis, Kluis Advisors, says despite the latest Chinese purchases of U.S. soybeans, the market needs fresh bullish news each day.

“Soybean traders got another announcement of an export sale to China on Tuesday morning, which puts the total since last Friday at 720,000 metric tons. Why did soybeans slip with the bullish news? Recall that prices rallied nicely on the prospects China was buying U.S. soybeans. This is a great example of “buy the rumor, sell the fact.” The bulls need some fresh news before they will be willing to mount another push higher,” Kluis told customers in a daily note.

Kluis added, “The Federal Reserve Board will release its decision on short-term interest rates this afternoon. Many analysts expect to see at least one more rate cut this year. Will it be today? Whatever the Fed commentary reveals about future monetary policy decisions will likely have a big impact on the stock market and the U.S. dollar.”

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TUESDAY’S GRAIN MARKET REVIEW

On Tuesday, the CME Group’s farm markets give back the gains from yesterday’s trade.

At the close, December corn futures finished 6¢ lower at $3.68; March corn futures closed 56¢ lower at $3.80.

November soybean futures ended 6¼¢ lower at $8.93; January soybean futures closed 6½¢ lower at $9.07.

December wheat futures settled 4¼¢ lower at $4.84¾.

December soy meal futures ended $1.10 per short ton lower at $297.80. December soy oil futures finished 0.29¢ lower at 29.99¢ per pound.

In the outside markets, the NYMEX crude oil market is $3.64 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 8 points lower.

On Tuesday, private exporters reported to the USDA export sales of 260,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says investors are squarely focused on harvest results and the crude oil market.

“Grain traders are more interested in hearing what the early yield reports have to say. It is still worth watching crude oil prices,” Kluis told customers in a daily note.

Kluis added, “It is still early, but the early yield indications for harvest in the U.S. are not sounding great. Many reports from clients suggest we need a few weeks of warm, dry weather for this crop to finish.”

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MONDAY’S GRAIN MARKET REVIEW

On Monday, investors are eyeing the weekend news of the disruption of the Saudi Arabia oil supply, U.S. weather, and China’s purchases of U.S. soybeans.

At the close, December corn futures finished 5¼¢ higher at $3.74; March corn futures closed 4½¢ higher at $3.86.

November soybean futures settled 1¼¢ higher at $9; January soybean futures ended 1½¢ higher at $9.13¾.

December wheat futures finished 5¼¢ higher at $4.88¾.

December soy meal futures closed $2.60 per short ton lower at $298.90. December soy oil futures closed 0.85¢ higher at 30.28¢ per pound.

In the outside markets, the NYMEX crude oil market is $7.48 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 122 points lower.

On Monday, private exporters reported to the USDA export sales of 256,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Britt O’Connell, cash advisor for Commodity Risk Management Group, says corn is showing nice gains starting on the overnight session and carrying through, here, today.

“With many expecting a bottom firmly in place on corn, short positions are being covered. You’re also seeing some outside strength helping support corn. After significant damage was done over the weekend to the Saudi oil fields, oil is reacting with a gap higher overnight of over $5. With the extent of the damage now fully estimated, fears around the larger scale impact from a political perspective are being assessed. Generally speaking, high oil prices are good for corn,” O’Connell says.

O’Connell added, “Hopeful that this increases ethanol demand. The other large demand sector for corn is cattle. Trading at multiyear lows after the Tyson plant fire in Kansas, it appears as if that market has found some support, as well. While we need continued strength in that market, sentiment is turning more favorable.”

China is rumored to have bought 15 cargos of soybeans off the P&W last week with 1 to 3 million tonnes rumored to be additional bookings, she says. The 204,000 tonnes have been confirmed as a sale to China last week. Most of this news hit the market last week.

“A bearish weather forecast is going to continue to stare down a bean crop that, while less than last year, still wrestles with burdensome supplies; $9 has a psychological effect, and it may not yet be convinced enough to blow through,” she says.

O’Connell added, “It seems that traders are so over the trade war and the rhetoric around it. I believe that until we can see and smell the dry ink on a deal, the markets’ reactions will remain somewhat muted,” O’Connell says.