Afternoon Market Recap for Oct. 24, 2019

October 25th, 2019

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Category: Grains

(Canby Farmers) – Corn, soybeans and wheat all land in the red Thursday

Another tepid round of export sales data from USDA this morning kicked off some more technical selling, pushing grain prices lower again today. Corn and soybeans faced only fractional cuts, with wheat dropping 0.5% to 0.75% in the session.

According to the latest U.S. Drought Monitor updates, out Thursday morning, drought’s footprint has retreated slightly from a week ago but still remains relatively high compared to this spring and summer, with 37.3% of the country currently affected. Most of the Midwest and Plains are trouble-free, with the exception of Indiana and Ohio.

On Wall St., some poor third-quarter earnings reports – 3M, in particular – pushed the Dow down 47 points in afternoon trading to 26,786. Energy futures continued to rally higher today, with crude oil up another 0.5% this afternoon on tighter domestic inventories, while diesel and gasoline saw gains of around 1%. The U.S. Dollar firmed slightly.

Corn prices softened slightly on some light technical selling Thursday, partly spurred by another round of sour export data from USDA this morning. December futures slipped a penny to $3.8675, with March futures down another 1.75 cents to $3.98.

Corn basis bids were mostly steady across the central U.S., although prices did tip 5 cents lower at an Illinois ethanol plant, 5 cents higher at an Indiana ethanol plant and 8 cents lower at a Nebraska processor today.

Corn exports only notched 19.4 million bushels in old crop sales and another 3.6 million bushels in new crop sales last week for a total of 23.0 million bushels. That was moderately improved from the prior week’s tepid 14.5 million bushels and barely above trade estimates of 21.7 million bushels. Corn export shipments were a little better, at 19.3 million bushels.

The International Grains Council slightly reduced its estimates for global 2019/20 corn production, with lower yield potential in Argentina partially offset by an expected uptick in China. IGC pegs total production at an estimates 1.098 billion metric tons (more than 39 billion bushels).

Variability has been the name of the game during this year’s embattled growing season. Farmers recently reporting to Feedback From The Field have seen corn yields range from 90 bushels per acre all the way up to 240 bpa. Click here to read the latest round of farmer anecdotes and view our interactive map.

It’s not unusual for diesel prices to dip in late October, according to Farm Futures senior grain market analyst Bryce Knorr. That makes fuel prices worth looking at, depending on where your suppliers buy from. Learn more in Knorr’s latest Energy/Ethanol Outlook column.

Preliminary volume estimates were for 208,223 contracts, firming 15% above Wednesday’s final count of 180,360.

Soybean prices also took small cuts on some technical selling Thursday, as traders attempted to balance a new large sale to China announced early today with USDA’s latest batch of lackluster export data. Prices ended the session slightly in the red, with November futures slipping half a penny to $9.3325 and January futures down 1.25 cents to $9.47.

Soybean basis bids rose 2 to 8 cents higher at a handful of Midwestern locations Thursday but were otherwise steady across the central U.S. today.

Private exporters reported to USDA the sale of 9.7 million bushels of soybeans for delivery to China during the 2019/20 marketing year, which began September 1. This has been the eighth large soybean sale reported so far in October, all of which have come from China or unknown destinations.

Last week’s soybean exports only reached 17.5 million bushels – only about a third of the prior week’s haul of 58.8 million bushels. It also slumped far below trade estimates of 44.1 million bushels and moved the weekly rate needed to match USDA forecasts higher, to 23.0 million bushels. Soybean export shipments were more robust, reaching 50.8 million bushels.

The International Grains Council expects global soybean production in 2019/20 to retreat 6.9% lower year-over-year, reaching 12.530 billion bushels, primarily due to lower production expected in the U.S.

Pending a partial trade deal with the U.S., China indicated it would be willing to purchase $20 billion in U.S. agricultural goods this coming year, bringing totals to around pre-trade war levels. No agreements have been signed at this time, however.

Preliminary volume estimates were for 285,929 contracts, falling moderately below Wednesday’s final count of 379,150.

Wheat prices took moderate cuts Thursday on the familiar specter of large domestic stocks and sluggish exports, which sparked some more technical selling. December Chicago SRW futures fell 4.75 cents to $5.16, December Kansas City HRW futures dropped 3.5 cents to $4.1975, and December MGEX spring wheat futures lost 2.25 cents to $5.4025.

Wheat export sales turned in a disappointing 9.6 million bushels last week, falling below the prior week’s tally of 14.5 million bushels and trade estimates of 16.5 million bushels. Wheat export shipments saw 18.3 million bushels last week, meantime.

The International Grains Council has lowered its outlook for global wheat production for 2019/20 by more than 73 million bushels to 27.999 billion bushels, largely on lower production potential coming out of drought-stressed Australia and Argentina.

Taiwan purchased 3.3 million bushels of milling wheat from the U.S. in an international tender that closed earlier today. The grain will be shipped from the PNW in December and January.

Preliminary volume estimates were for 55,242 CBOT contracts, down from Wednesday’s final tally of 63,192.

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