Afternoon Market Recap for June 13, 2019

June 14th, 2019


Category: Grains

(FarmProgress) – Late-planted crops continue to push corn and soybeans higher

Corn prices added more than 2% Thursday, with soybeans up around 1% and most wheat contracts up around 1.5% today. Concerns continue to build over this year’s late-planted U.S. crops – enough so that traders mostly shrugged off a round of mediocre export data from USDA this morning.

Another round of raiy weather will arrive in the eastern Corn Belt this weekend, bringing another 1” or more rainfall to large parts of Illinois, Indiana, Michigan and Ohio through Sunday, per the latest 72-hour cumulative precipitation map from NOAA. Temperatures will also be relatively mild for the next several days, with daytime highs expected to be below normal for much of the central U.S. at least into early next week.

Meantime, U.S. forecasters are giving El Niño a 66% chance to hang on through the summer, with a 50-55% chance it will extend into the fall and winter months. Click here to learn more about how this weather phenomenon can affect crop production across the globe.

After a short hiatus, Wall St. is starting to heat back up in June, with the Dow rising another 100 points this afternoon to 26,105. Energy futures also rebounded, with crude oil tracking 2.5% higher this afternoon to climb back above $52 per barrel, with gasoline and diesel up around 2%. The U.S. Dollar softened fractionally.

USDA announced this morning it will relocate the agency’s Economic Research Service and National Institute of Food and Agriculture to Kansas City. “[The region] provides a win-win – maximizing our mission function by putting taxpayer savings into programmatic outputs and providing affordability, easy commutes, and extraordinary living for our employees,” said Secretary of Agriculture Sonny Perdue. The move will bring several hundred jobs to the Kansas City area.

Corn prices continued to push higher Thursday on continued concerns over planting delays, receiving additional headwinds from broad commodity gains in stock and energy prices today, as well as steadily improving cash basis prices. July futures added 12 cents to $4.42, with September futures up 9.5 cents to $4.4775.

Corn basis bids were steady to firm Thursday, rising 1 to 4 cents higher across multiple Midwestern locations today.

Private exporters announced to USDA the sale of 6.9 million bushels of corn for delivery to Mexico during the 2019/20 marketing year, which begins September 1.

Corn exports notched 6.6 million bushels in old crop sales last week, plus another 3.7 million bushels of new crop sales, for a total of 10.3 million bushels. Old crop sales easily bested the prior week’s dismal tally but remained 64% down from the four-week average. Total sales also slumped below trade estimates, which ranged between 13.8 million and 33.5 million bushels.

Corn export shipments were more robust last week after reaching 35.0 million bushels – enough to push 15% ahead of the prior week’s total but still down 18% from the four-week average. Japan was the No. 1 destination, with 12.7 million bushels.

Argentina’s Rosario grains exchange is projecting a 2018/19 corn harvest topping 1.856 billion bushels, which is 4% higher than prior estimates after accounting for increased acres in the country’s Santa Fe region.

Ukrainian consultancy ProAgro has raised its estimates for the country’s 2019 corn production to 1.283 billion bushels, on average yields of 101.9 bushels per acre.

Generally concerned with competition among other production regions, European Union consultancy Strategie Grains lowered its estimates for EU 2019/20 soft wheat exports by more than 36 million bushels to 812 million bushels.

China sold just over 100 billion bushels of its state reserves of corn at auction earlier today, which was 63.9% of the total available for sale.

Preliminary volume estimates were for 741,768 contracts, down slightly from Wednesday’s final count of 802,545.

Soybean prices ticked about 1% higher Thursday on planting delay concerns, with USDA still estimating 40% of the crop hadn’t been planted as of June 9. July futures gained 10 cents to $8.88, with August futures up 9.75 cents to $8.9450.

Soybean basis bids were largely steady to firm Thursday after ratcheting 4 to 5 cents higher across multiple Midwestern locations today. An Ohio elevator bucked the trend, slipping a penny lower.

Soybean exports found 9.4 million bushels in old crop sales and 10.1 million bushels of new crop sales for a total of 19.5 million bushels last week. That dipped slightly below the prior week’s total of 21.5 million bushels but stayed in the middle of trade estimates, which ranged between 11.0 million and 29.4 million bushels.

Soybean export shipments fared better, at 27.9 million bushels – trending 40% above the four-week average. China led all destinations, with 14.8 million bushels.

Argentina’s Rosario grains exchange slightly reduced its projection for the country’s 2018/19 soybean production to 2.076 billion bushels, citing excessive rains in its northeastern region.

Preliminary volume estimates were for 164,402 contracts, shrinking 45% below Wednesday’s final count of 298,834.

Wheat prices were mixed but higher, with some contracts trending nearly 2% higher today on a round of technical buying partly prompted by spillover strength from other commodities. July Chicago SRW futures gained 9.25 cents to $5.3550, July Kansas City HRW futures added 6 cents to $4.6875, and July MGEX spring wheat futures picked up 1.5 cents to $5.6525.

Wheat’s marketing year rolled over June 1, landing a small net increase last week after export sales of nearly 12.0 million bushels to Japan, Mexico, Taiwan, Iraq and Vietnam were largely offset by reductions from unknown destinations, the Philippines and South Korea. The trade expected USDA to report wheat sales totaling between 7.3 million and 18.4 million bushels.

USDA carried over another 58.3 million bushels in sales from the 2018/19 marketing year, which ended May 31.

Argentina’s Rosario grains exchange is estimating an uptick in the country’s 2019/20 wheat production to more than 808 million bushels, which would be a year-over-year increase of about 13%, if realized.

Ukrainian consultancy ProAgro slightly reduced its estimates for the country’s 2019 wheat production, to 1.032 billion bushels.

Preliminary volume estimates were for 117,826 CBOT contracts, dropping nearly 41% below Wednesday’s final count of 198,495.

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