Grain prices see small adjustments as traders mull President’s Day holiday
Soybeans started Friday morning lower as profit takers moved into the picture. The multiday rally nearly hung on, however, with prices trending higher later in the morning on news of Brazil soybean harvest delays. It wasn’t enough, though – prices fell back into small losses by the close, dropping by around 0.3%. Corn and wheat prices also made small adjustments ahead of the upcoming three-day weekend.
The latest U.S. Drought Monitor updates, out yesterday, show drought’s footprint has retreated slightly over the past two weeks, from a peak of 67.1% of the country affected to 60.5% now. Parts of the Plains and Midwest are among the areas hardest hit, although the latest cumulative seven-day precipitation forecast shows some of these geographies could find opportunities to partially replenish next week.
Stock markets continue to mount a comeback after early February’s downward correction. The Dow was up another 126 points in late morning trading Friday on various bullish economic news, including reports that U.S. homebuilding is on the rise. The U.S. Dollar firmed slightly but is down nearly 3.5% so far in 2018. Energy prices were mixed but mostly trending higher.
What’s in store for grain markets this year? Farm Futures senior grain market analyst has released five videos (and counting) offering his exclusive analysis. Today’s content covers fuel and fertilizer, with links to all of the other videos.
Grain markets are closed Monday, February 19, in observance of the President’s Day holiday. The Farm Futures morning market preview and afternoon market recap will commence Tuesday, February 20.
Corn prices edged fractionally lower on a round of technical selling but finishes the week with around 1.5% gains. March futures slipped 0.25 cents to $3.6750, and May futures fell 0.5 cents to $3.75. Healthy export demand kept losses to a minimum.
Spot basis bids were mostly steady but mixed Friday, down as much as 2 cents and up as much as 3 cents across Midwestern locations.
Private exporters reported to USDA two large export sales on Friday. The first was for 4.6 million bushels of corn for delivery to Japan for the 2017/18 marketing year, which began September 1. The second was for 28,000 metric tons of soybean oil for delivery to South Korea, also in 2017/18 (the marketing year for soybean oil begins October 1). Two additional large export sales announcements were made earlier this week on Monday and Wednesday.
Corn speculators switched to a net long position of 11,010 contracts after adding 82,734 this past week.
Preliminary volume estimates were for 335,444 contracts, falling nearly 13% lower than Thursday’s final count of 385,552.
Soybean prices started lower on a round of profit taking but nearly rallied back into the green after digesting news of Brazil’s relatively slow harvest pace. March futures finished the session down 2.75 to $10.2150, with May prices dropping 2.5 cents to $10.3250. All told, March futures finished the week 3.9% higher.
Spot basis bids were down 2 to 4 cents across multiple Midwestern locations Friday as farmer sales remained relatively high amid stronger prices.
Reports from Brazil have Mato Grosso’s harvest at just 45% complete after harvest delays due to heavy rains. Nationwide, Brazil farmers have harvested just 17% of the soybean crop, versus last year’s pace of 26%. Some soybeans have been delivered at 40% moisture – far above the standard 14%, according to “South American Crop Watch” columnist James Thompson.
Soybean speculators switched to a net long position of 11,129 contracts after adding 57,658 this past week.
Preliminary volume estimates were for 310,306 contracts, nearly 10% lower than Thursday’s final tally of 343,560.
Wheat prices saw mixed results from some technical maneuvering in Friday’s session. March Chicago SRW were down 4 cents to $4.5775, but March Kansas City HRW prices held onto 0.25-cent gains to $4.7825. March MGEX Spring Wheat contracts fell 3.25 cents to $6.0450.
For the week, soft red winter wheat prices trended 2.0% higher, hard red winter wheat prices trended 5.5% higher, and spring wheat prices trended 0.2% higher.
The latest French estimates show its wheat and barley crop ratings are lower year over year, with 84% of its soft wheat crop, 81% of its durum crop and 83% of its barley crop in good-to-excellent condition. Compare that to last year’s levels of 92%, 85% and 91%, respectively.
Pakistan has sold an additional 7.3 million bushels of wheat for export, bringing total year-to-date exports to 25.7 million bushels. Much of the grain is headed to Afghanistan, Bangladesh, East Africa, Malaysia, Sri Lanka, Vietnam and the United Arab Emirates, for shipment between February and April.
Iraq has purchased 5.5 million bushels in a tender that closed Sunday, with offers required to remain valid until February 15. The tender was for wheat originating in the U.S., Canada and Australia, with each country accounting for a third of the total purchase.
Jordan has issued another international tender to purchase 3.7 million bushels of animal feed barley from optional origins, for shipment in August or September. The tender closes February 21
Wheat speculators cut their net short position to 75,906 after shedding 30,795 contracts this past week.
Preliminary volume estimates were for 149,056 CBOT contracts, down 16% from Thursday’s final count of 177,886.