Corn and soybeans rebounded on bargain buying after Tuesday's tumbles, while reports of low yield prospects in spring wheat helped carry the wheat markets higher.
The corn and soybeans recovered about half of what they lost on Tuesday when fund selling hit a large swath of the markets.
Weather forecasts for this week have not changed much, with storms moving across Iowa and Illinois Wednesday. The latest 6- to 10-day outlook (July 31-Aug. 4) is cool and dry for the Midwest, while the 8- to 14-day outlook (Aug. 2-8) favors seasonal summer temperatures for the Midwest and warm in the northern Plains.
The dollar moved lower after the Federal Reserve Bank left interest rates unchanged and said inflation is currently just under its 2% target. Equities bounded higher after another batch of good quarterly results, the latest included Boeing and AT&T. The Dow Jones industrials were up about 100 points when the crops closed.
Gold was up about $3.10/oz., despite the inflation news. Crude oil is higher again and at a new six-week high after a government report showed a larger-than-expected drop in weekly supplies.
Export notes (from the U.S. Department of Agriculture and Reuters):
- Bangladesh bought about 50,000 metric tons of wheat, with reports saying it will be filled by Russia.
- Algeria bought about 500,000 metric tons of wheat with Eastern Europe and South America the likely suppliers.
- Jordan passed on offers in its latest tender for 100,000 metric tons of wheat. A new tender is expected.
- Iraq tendered to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes on July 31, with offers remaining valid until Aug. 6.
Corn closed about 4 cents/bu. higher, but September and December remained well under key moving averages.
Bargain buying likely lifted the contracts after Tuesday's drop to a two-week low. Funds turned net buyers Wednesday after selling the previous three sessions.
USDA early this week lowered the corn crop's condition rating two points to 62% good/excellent, which was close to trade forecasts. However, investors appeared to react to the mild weather expected for the Midwest and bearish technical signals.
The Chicago Board of Trade (CBOT) estimated Wednesday's volume at 374,412. Tuesday's actual volume was 364,382. Open interest in Tuesday's lower market increased by 8,242, with September's down 1,338 and December's up 3,428.
September corn closed up 4 cents at $3.72-3/4, and new-crop December rose 3-3/4 cents to $3.86/bu.
What to Look For: Corn export sales on Thursday are expected to be unchanged to down from a week ago for the old crop but unchanged to higher for new crop. The corn harvest began this week in the South and should soon gain traction in eastern Texas.
Soybeans recovered nearly half of what they lost Tuesday, with some likely help from gains in crude oil. The two commodities, at times, have moved in the same direction due the crop's link to crude via biodiesel.
Fund buying was noted after being net sellers in previous sessions. August soybeans moved back above some key moving averages but remained under the 200-day mark. November beans are now above most key averages, including the 20-day.
In other oilseed markets, Winnipeg, Man., canola for November posted solid gains after Tuesday's drop to a three-week low. Europe's rapeseed was higher, with nearby August up after a five-session stretch of losses.
CBOT estimated Wednesday's volume at 202,041. Tuesday's actual volume was 327,391. Tuesday's open interest in the lower market decreased by 5,176, with August's down 10,265 and November's up 5,298.
August closed up 7-1/4 cents at $9.88-3/4, and new-crop November rose 7-1/2 cents to 10.00-1/4.
What to Look For: Old-crop and new-crop soybean export sales on Thursday are expected to be down from last week's hefty numbers. Last week's new-crop sales tally included a large sale to China. Mild weather appears to be ahead for Midwest soybeans, which are entering or are close to entering seed production.
Spring wheat bounded higher and pulled winter wheat up with it as crop tour findings confirmed previous reports of drought damage to the North Dakota crop.
Social media carried tour pictures of sparsely populated fields of poorly developed spring wheat. Forecasts put scattered showers in the northern Plains late this week, but the rain will not make up for fewer acres and the drought damage done early in the growing season.
September spring wheat remained under the 20-day moving average and finished with an RSI near 49.5. Harvest in the Dakotas is about two weeks away. September soft red winter wheat and hard red winter wheat contracts stayed under the 20- and 50-day averages, with hard red winter wheat just above the 100-day average.
CBOT estimated Wednesday's soft red winter wheat volume at 105,800. Tuesday's actual volume was 185,944. Open interest in Tuesday's sharply lower soft red winter wheat market decreased by 5,388, with September's down 8,946 and December's up 4,227. Kansas City, Mo., hard red winter wheat's actual volume on Tuesday decreased by about 11,000 to 54,417, with open interest up 1,392.
Chicago, Ill., September soft red winter wheat closed up 3-3/4 cents at $4.77-3/4. Kansas City September hard red winter wheat rose 2-3/4 cents to $4.75-1/2. Spring wheat for September was up 12-1/2 cents to $7.30.
What to Look For: Weekly export sales on Thursday are expected to be down from a week ago, according to a Reuters poll. Weather will be key as spring wheat heads into next month's harvest.