Markets

GRAIN MARKETS: Cold, wet forecast for Midwest lifts corn

Rebound in Brazil’s real supports soybeans.

Corn futures closed higher for the day and for the fourth straight week as rain and cold weather may impede the last of this year’s planting and possibly cause some fields to be replanted.

Soybeans finished higher for the day but lower for the week. Investors are watching action in Brasilia, Brazil’s capitol city, where President Michel Temer is being investigated for bribery. The Brazilian real on Friday recovered about half of what it lost yesterday when the allegations were first reported.

Wheat had big daily gains with hard red winter wheat recovering nearly all that it lost earlier this week. Severe storms and flash flooding are expected in the Plains today and in the Midwest tomorrow, where winter wheat needs dry conditions.

The 6- to 10-day outlook (May 24-28) is cool and dry for the western Midwest but cool and wet for the eastern areas.

The political drama in Washington continues but equity markets moved higher as investors focused on solid earnings at Deere and Co. and an analyst’s upgrade to discount retailer Walmart. Wall Street had big gains with the Dow Jones industrials up about 174 points when the crops closed. Crude oil was up about a dollar as world producers talk about extending production cuts. The dollar was lower and on track for a big weekly loss.

Exports – USDA, Reuters:

- Jordan posted a tender to buy 100,000 metric tons of optional-origin milling wheat after not buying wheat in an earlier tender. The new tender closes May 23. No shipment was listed, but shipment in its previous tender was October-November.

- Jordan also seeks to buy 100,000 tonnes of optional-origin feed barley. The tender concludes May 24 and shipment is for October-November shipment.

- Saudi Arabia is tendering to buy 1.5 million tonnes of feed barley. The tender deadline is Friday. Shipment details were not available.

Corn futures closed about 6 cents higher and were higher for the fourth straight week. Worries about planting and replanting of soggy fields remain supportive with rain forecast for the Midwest through the weekend.

The lower dollar helped. The greenback is the lowest since November 9 and had big drop this week amid the turmoil surrounding President Trump. While the Washington events continue, investors on Friday looked to the weather and the potential for planting delays.

The Chicago Board of Trade (CBOT) estimated Friday’s corn volume at 346,136. Thursday’s actual volume was 309,461. Open interest in Thursday’s lower market increased by 20,173 with July’s up 13,252 and December’s up 1,453.

July corn closed up 6-1/2 cents at $3.72-1/2 and new-crop December rose 6-1/4 to $3.90-1/4.

What to Look For: Talk continues that replanting is needed in Illinois. Replanting may be hard to do this weekend as forecasts call for showers. The 6- to 10-day forecast, which includes next week, favors drier weather for the western Midwest.

Soybeans closed higher to recover about half of what they lost yesterday. They finished lower for the week as political investigations in Brazil and the U.S. rattled investors.

The investigation of Brazil’s leader continues, but the real currency on Friday recovered much of what it lost yesterday. The lower Real had Brazilian farmers selling their soybeans this week, which are priced in dollars.

CBOT estimated Friday’s volume at 158,493. Thursday’s actual volume was 399,334. Thursday’s open interest in the lower market increased by 9,919 with July’s up 4,734 and November’s increased by 393.

July soybeans closed up 8-1/4 at $9.53 and August up 7-1/2 at $9.54-1/4. New-crop November rose 7 to $9.51-3/4.

What to Look For – Wet weather in the Midwest and the political investigations in Brazil and Washington dominated headlines and likely will be in next week’s headlines. USDA will update planting progress late on Monday. A year ago, the five-year average for that week was 52% planted.   

Wheat markets bounded higher in light trading with winter wheat getting support from the storms moving through the Plains.

Winter wheat needs dry weather, but is not getting it. Storms moved through the Plains this week, but the 6- to10-day outlook for next week favors drier weather there.

Spring wheat had solid gains as the problems in winter wheat and a push by Egypt for higher-protein supplies may enhance demand for higher-protein varieties.

CBOT estimated Friday’s SRW wheat volume at 73,046. Thursday’s actual volume was 105,141. Open interest in Thursday’s lower market increased by 5,326 with July’s up 2,331 and September’s up 947.

Chicago, Ill., July SRW wheat closed up 9-1/2 at $4.35-1/4 and September gained 8-3/4 to $4.48-1/2. Kansas City’s July hard red winter wheat rose 12 to $4.38 and September rose 11-3/4 to 4.55. Spring wheat for July rose 11 to $5.55-3/4 and September was up 11 at $5.62-1/2.

What to Look For – Much of the wheat in this week’s storm areas has headed with harvest about a month away. USDA will update conditions ratings on Monday. Last week winter wheat was rated 51% good/excellent, down 2 points from the prior week.

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