It’s Turnaround Tuesday for Soybean Market

August 20th, 2019


Category: Grains

( – On Tuesday, the CME Group’s farm markets move higher.

In early trading, corn prices have turned lower, after starting higher. At 9:25am, the Sep. corn futures are 3/4¢ lower at $3.64 3/4. Dec. corn futures are 3/4¢ lower at $3.73.

Nov. soybean futures are 5 3/4¢ higher at $8.59 3/4. Jan. soybean futures are 5 1/2¢ higher at $8.72.

Dec. wheat futures are even at $4.72.

December soymeal futures are $1.50 per short ton higher at $298.70. December soy oil futures are $0.29 higher at 29.33¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.23 lower, the U.S. dollar is higher, and the Dow Jones Industrials are 27 points lower.

Al Kluis, Kluis Advisors, says that investors are mixed on the markets.

“Weekend rain in the dry areas of the central Corn Belt  and improved weather forecast put pressure on the grain markets on Monday. Corn futures closed 6 cents lower, soybean futures closed 13 cents lower, wheat futures closed 2 to 5 cents lower. The USDA Crop Progress report showed corn and soybean ratings dropping by 1%, which is positive for prices in the overnight markets,” Kluis told customers in a daily note.

Kluis added, “What is next for the bull spreads in the corn market? Right before the bull market first started in May, the bull spreads started to pull in. Then–as prices approached the high in the third week of June–the bull spreads collapsed, signaling a top. The spreads were flat on Monday. However, long term, when the bull spreads start working, it will signal that corn prices are turning higher.”

Monday’s Grain Market Review

On Monday, the CME Group’s farm markets lose traction.

At the close, the Sep. corn futures finished 6¢ lower at $3.65. Dec. corn futures settled 6¼¢ lower at $3.74½.

Nov. soybean futures closed 13½¢ lower at $8.66¼. Jan. soybean futures ended 13¢ lower at $8.80½.

Dec. wheat futures closed 5¢ lower at $4.72½.

December soymeal futures closed $3.10 per short ton lower at $297.20. December soy oil futures are 0.47¢ lower at 29.04¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.19 higher, the U.S. dollar is higher, and the Dow Jones Industrials are 275 points higher.

Matt Tranel, cash adviser for Commodity Risk Management Group, says that the favorable weather pressures the farm markets.

“Looks like the expression of ‘rain makes grain’ has this corn market moving lower once again, to begin the week.  Rainfall covered a widespread region of the Corn Belt over the weekend, with precipitation exceeding what many had forecast. Plus, there appears to be more rain on the way for this week, and cooler temperatures, which would benefit further crop progress.”

Tranel added, “The funds are continuing to pressure this market from the results of the latest WASDE report last week. That will weigh on the market for a while. This week is all about crop tour. The trade will be paying very close attention to every state’s yield estimates, especially out of the eastern Corn Belt. If results confirm USDA estimates, expect more downside. If the crop tour’s numbers are lower than the USDA then we may get a pop. But $4-per-bushel December futures will be a tough nut to crack, with the info that we have to trade today.”

Al Kluis, Kluis Advisors, says investors are waiting for the next shoe to drop.

“The grain markets closed higher on Friday. The grain markets were very oversold and bounced back on Friday but closed lower for the week. The lows last week in the corn markets are likely to be the seasonal lows. In the last few years (2016 to 2018), the corn market has bottomed ahead of harvest. I do not look for a V-type of bottom, but rather the start of basing type market action,” Kluis told customers in a daily note.

Kluis added, “How much rain will hit early this week in the central and eastern Corn Belt? And where? That area remains dry, and the only chance of rain over the next two weeks is early this week. We expect steady conditions in today’s USDA Crop Progress Report.”

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