Ag markets turn mostly lower Friday

Brazil’s ability to fulfill China’s needs keeps a lid on rallies.

DES MOINES, Iowa -- On Friday, the CME Group’s farm markets are expected to display a continuing lackluster performance.

At midsession, the March corn futures are 1½¢ lower at $3.78. May corn futures are 2½¢ lower at $3.82¼.
 
March soybean futures 3¼¢ lower at $8.93. May soybean futures are 3½¢ lower at $9.02½.

March wheat futures are 2¾¢ higher at $5.47.

March soymeal futures are $2.10 per short ton lower at $289.80. March soy oil futures are 0.07¢ lower at 30.65¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.29 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 37 points lower.

Al Kluis, Kluis Advisors, says the markets are leaning toward remaining quiet.     

“Yesterday, we saw good export sales for wheat and corn, but soybeans were just average. South America has been picking up some business the past couple of weeks. Its harvest continues to pick up steam and it has a significant currency advantage over the U.S. Expect grain to remain in a very low-volume lackluster trade,” Kluis stated in a daily note to customers.

Kluis added, “Grain prices will remain very quiet with low volume until we get close to the March 31 Prospective Plantings Report and the quarterly Grain Stocks Report.”

-------------

Thursday’s Grain Market Review

On Thursday, the CME Group’s soybean market closed off its daily highs.

At the close, March corn futures finished 3½¢ lower at $3.79½; May corn futures closed 2½¢ lower at $3.84¾.
 
March soybean futures settled 3 ¾¢ higher at $8.96¼, after reaching near the $9 mark. May soybean futures finished 2½¢ higher at $9.06.

March wheat futures closed 3¼¢ lower at $5.44¼.

March soy meal futures ended 20¢ per short ton higher at $291.90. March soy oil futures finished 0.31¢ lower at 30.72¢ per pound.

In the outside markets, the NYMEX crude oil market is 27¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 51 points lower.

Jack Scoville, PRICE Futures Group, says China might be booking U.S. soybeans.

“There must be some Chinese buying going on in the beans, otherwise I know of no reason for that market to rally. Wheat is down once again on spec selling tied to lower Russian and European prices. Corn is down because there is no real reason to buy. The beans are the animal today and have got everyone confused as to what is going on with them. Might be Chinese buying or might not be, but the idea appears to be there either way,” Scoville says.

Al Kluis, Kluis Advisors, says the markets are leaning on bull spreads.     

“The bull spreads are working. That suggests we could see some higher prices coming. We hear talk that China is looking for soybeans bids off the PNW. That helped support grain prices. If China steps in to buy grain from the U.S., then that could be what the market needs to get jump-started. Supplies are getting tight in China; domestic prices there are pretty high for corn and soybeans,” Kluis stated in a daily note to customers.

Kluis added, "Yesterday, crude oil shrugged off some negative news from the EIA numbers. That will be positive for all commodities moving forward."

Separately, the USDA’s Weekly Export Sales Report Thursday shows strong corn and wheat demand figures.

• Corn: 968,800 metric tons (mt) vs. the trade’s expectations of between 700,000-1.4 mmt
• Soybeans: 651,100 mt vs. the rade’s expectations of 600,000-1.1 mmt
• Wheat: 687,100 mt vs. the trade’s expectations of between 300,000-700,000 mt
• Soybean meal: 234,200 mt vs. the trade’s expectations of 100,000-400,000 mt

------------

Wednesday’s Grain Market Review

On Wednesday, the CME Group’s farm markets find buyers, as the macromarkets turn stronger.

At the close, March corn futures finished 3¾¢ higher at $3.83; May corn futures finished 3¢ higher at $3.87½.
 
March soybean futures settled 7¾¢ higher at $8.92¼; May soybean futures finished 6¼¢ higher at $9.03.

March wheat futures closed 5½¢ higher at $5.47¼.

March soy meal futures finished 90¢per short ton higher at $291.70. March soy oil futures closed 0.31¢ higher at 31.03¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.32 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 231 points higher.

Al Kluis, Kluis Advisors, says investors did not see much to trade in yesterday’s USDA February Supply/Demand Report.     

“First, the combined soybean production from Argentina and Brazil this year would be a record. We have discussed the idea that the South American crop would likely be a large crop; now the USDA is suggesting it will beat the record posted last year. Second, U.S. soybean stocks fell. However, the world balance sheet jumped more than expected. As a result, soybean futures ended the day nearly unchanged. Finally, wheat was hit hard as the bull camp did not get what it needed to rally prices off of major support,” Kluis stated in a daily note to customers.

Kluis added, “The nearly steady soybean close on Tuesday is a good sign for the bulls. This is good news, because with the steady close came a bid for volatility in the options. We have not seen this in the options for a few weeks.”

-------------

Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets trade lower.

At the close, March corn futures finished 2¢ lower at $3.79¼; May corn futures finished 2¼¢ lower at $3.84¼.

March soybean futures closed ½¢ higher at $8.84¾; May soybean futures ended unchanged at $8.97¾4.

March wheat futures closed 10¢ lower at $5.42.

March soy meal futures finished 60¢ per short ton lower at $290.80. March soy oil futures closed 0.10¢ higher at 30.72¢ per pound.

In the outside markets, the NYMEX crude oil market is 8¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 36 points higher.

Al Kluis, Kluis Advisors, says investors will be eyeing today’s USDA February Supply/Demand Report.     

“Will the USDA take ending stocks lower for corn and soybeans? That is what the trade is expecting from the report at 11 a.m. today. However, I have my doubts if the USDA will make that change to ending stocks, ” Kluis stated in a daily note to customers.

-------------

Monday’s Grain Market Review

On Monday, the CME Group’s farm markets closed mixed.

At the close, March corn futures finished 1¾¢ lower at $3.81¼; May corn futures finished 2¢ lower at $3.86¼.
 
March soybean futures settled 2¼¢ higher at $8.84½; May soybean futures closed 2¼¢ higher at $8.97¼.

March wheat futures closed 6¾¢ lower at $5.52.

March soy meal futures settled $2.10 per short ton higher at $291.40. March soy oil futures closed 0.35¢ lower at 30.62¢ per pound.

In the outside markets, the NYMEX crude oil market is 71¢ per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 68 points higher.

Britt O’Connell, cash adviser for Commodity Risk Management Group, says investors are mainly just prereport positioning.

“Soybeans have impressively been able to find positive territory to start the week. The move up is surprising, given that the Brazilian real has reached all-time lows, a massive – if not record  – crop expected to be coming forward, and a strong U.S. dollar. It’s likely that we’re seeing a little bit of a positive reaction to China starting to move back toward more ‘normal’ day-to-day operations. It seems maybe it has contained the coronavirus.”  

O’Connell added, “Corn is treading water at the bottom end of the range. With not much to talk about regarding corn, it is hard to find positive traction. Funds continue to be sellers of corn and soybeans, while showing continued love towards Chi wheat.”

Al Kluis, Kluis Advisors, says investors will take today to prepare positions ahead of tomorrow’s USDA February Supply/Demand Report.     

“Will the bull spreads continue to work in both corn and soybeans? This – plus firming basis – is a positive signal for prices,” Kluis stated in a daily note to customers.