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Afternoon Market Recap for June 21, 2018

Wet weather gives corn a small assist.

Soybean prices continue to fall, with overseas production concerns lifting wheat.

Reports of flooding in Iowa, Minnesota and other key parts of the Corn Belt gave prices a small boost Thursday. Wheat prices were also higher, mainly on Russian production concerns, while poor U.S.-China trade relations continued to erode soybean prices.

The latest U.S. Drought Monitor, out Thursday morning, shows the current drought’s footprint covering between 42% and 47% of the U.S. for the past three months. Parts of Kanas, Oklahoma, the Texas Panhandle and the desert Southwest continue to suffer from the most intense severity at the moment. NOAA’s latest assessment for weather later this summer shows the Southwest could see some wetter-than-normal conditions between July and September, with the Midsouth and parts of Texas getting hit with drier-than-normal conditions during this time.

Trade concerns, plus stumbling prices from some large companies that included Amazon and Intel, had the Dow down more than 140 points Thursday afternoon, reaching 24,515. Embattled energy stocks also faded again, with crude oil, gasoline and diesel futures all trending lower Thursday afternoon. The U.S. Dollar also softened slightly.


Corn prices
found some modest support in a choppy session Thursday on some reports of flooding in parts of the Midwest. Gains were capped by less-than-impressive export data from USDA. July and September futures each added 2.75 cents to close at $3.57 and $3.6650, respectively.

Slumping farmer sales lifted corn basis bids between 2 and 4 cents across several Midwestern locations Thursday.

Corn export sales last week tallied 6.5 million bushels in old crop sales, plus another 13.4 million bushels in new crop sales, for total sales of 19.9 million bushels. That total was dismally short of both the prior week’s 46.3 million bushels and trade estimates of 44.3 million bushels.

Corn export shipments came in at a more robust 40.5 million bushels, but that total also fell short of matching the weekly rate needed to meet USDA forecasts, now at 58.2 million bushels. Japan was the No. 1 destination.

The EPA reports that the U.S. generated 1.30 billion ethanol blending credits last month, ticking slightly higher than the 1.24 billion generated in April.

European Union corn imports remain nearly 35% higher year-over-year, having reached 653.5 million bushels as of June 19.

South Korea’s flurry of corn purchases continues. The latest is from the country’s corn processing association (KOCOPIA), which bought nearly 2.4 million bushels, likely sourced from the U.S., in an international tender for arrival in late October.

China sold 55.8 million bushels of its state reserves of corn at auction Thursday, which was nearly 36% of the total available for sale.

Preliminary volume estimates were for 378,044 contracts, slipping moderately from Wednesday’s final count of 463,022.

Soybean prices continue to feel the heat from troubled U.S.-China trade relations, where the commodity remains on the front lines of potential Chinese tariff retaliations. July and August futures lost 9 cents each, closing at $8.8050 and $8.8550, respectively.

Soybean basis bids were mostly unchanged Thursday, moving 2 cents lower at an Iowa processor and 6 cents higher at an Illinois river terminal.

Soybean exports found 11.1 million bushels in old crop sales plus another 8.4 million bushels of new crop sales for a total of 19.5 million bushels. That total was more than a third lower than the prior week’s 29.8 million bushels and also modestly behind trade estimates of 25.7 million bushels. Cumulative exports for 2017/18 have now exceeded USDA’s forecasts for this marketing year.

Soybean exports shipments last week reached 43.2 million bushels. The Netherlands was the No. 1 destination.

The EPA reports that the U.S. generated 343 million biodiesel blending credits last month, up around 9% from April’s total of 315 million.

EU soybean imports lag about 4% behind last year’s pace, having reached 481.3 million bushels as of June 19. Soymeal imports are up about 3.5% and palm oil imports are fractionally lower over the same time.

Argentina’s Agriculture Ministry is slightly more bullish on the country’s soybean production potential for the 2017/18 crop, moving from prior estimates of 1.345 billion bushels to 1.367 billion bushels.

Preliminary volume estimates were for 233,705 contracts, falling 20% below Wednesday’s final count of 293,110.

Wheat prices found traction over reports of a smaller Russian crop, further buoyed by a round of bargain buying. Winter wheat crops found the biggest bounce, with July Chicago SRW futures gaining 7 cents to $4.9525 and July Kansas City HRW futures adding 4.25 cents to $4.93.

Wheat export sales last week reached 17.0 million bushels, which was a moderate improvement over both the prior week’s total of 11.1 million bushels and trade estimates of 13.8 million bushels.

Wheat export shipments reached 13.6 million bushels last week. Japan was the No. 1 destination, with 2.9 million bushels.

A French consultancy, Agritel, thinks Russia’s wheat production this year will weigh in 21.5% lower than its record-breaking 2017 crop, landing at around 2.477 billion bushels, with drought likely to clip yields this season. Agritel’s crop tour in southern Russia last week still concluded yields could stay 1.3% above the five-year average, however.

Bulgaria could match its record 2017 wheat crop, meantime, with the country’s agriculture ministry expecting a similar crop of around 224 million bushels this season.

EU soft wheat exports have topped 709 million bushels as of June 19, which is about 18% below the pace from last year. Barley exports are up about 2% during the same time.

The Philippines issued an international tender to buy nearly 8.1 million bushels of feed wheat in four consignments, for shipment between August and November, depending on origin.

Japan has purchased nearly 3.4 million bushels of food-quality wheat from the U.S. and Australia in a tender that closed Thursday.

Preliminary volume estimates were for 163,378 CBOT contracts, falling moderately below Wednesday’s final count of 190,815.

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

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