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GRAIN MARKETS: Soybeans spin higher; corn struggles

Wheat finishes strong after tumble.

By Ben Potter

Strong export news and crop yield concerns were enough to lift soybean prices Aug. 24, while corn futures struggled to gain ground amid bountiful world supplies.

On Wall Street, stocks fell slightly, as low volume and weak performance continue to define the late-summer lull. Weather experts have a watchful eye on Texas, where Tropical Storm Harvey has a chance to be the first hurricane to hit the Lone Star state since 2008. Catastrophic flooding is now likely in Texas and western Louisiana. The storm could also have implications on energy prices, although west Texas crude fell today and is still trading below $50 per barrel. Out west in Jackson Hole, Wyo., the Federal Reserve Bank will discuss whether low inflation rates should impede another interest rate hike.

Corn prices traded in a narrow range today but finished slightly higher, adding another $0.075 by the close to finish at $3.565. Those looking for bullish news can point to the International Grains Council, which cut its global corn production estimates for 2017-18 by 110.2 million bu. That’s still a slender amount when measuring against a total world crop that could exceed 37 billion bu.

The council's estimate accounts for lower crop yields in the European Union and China. In the U.S., yield estimates were 169.5 bu. per acre in the U.S. Department of Agriculture’s Aug. 10 "World Agricultural Supply & Demand Estimates" report. The next such report is due Sept. 12, with mostly favorable Midwestern weather predicted across the Corn Belt until that time. Cooler and drier-than-normal weather is expected across the Midwest for late August and early September.

As the 2016-17 marketing year winds down, corn sales this week were lackluster, totaling 4.0 million bu. in old-crop sales and 16.7 million bu. in new-crop sales -- well behind last week’s total of 28.9 million bu. and behind trade guesses as well. Corn shipments also continue to run behind the rate needed to meet USDA's annual projection for the 2016-17 crop.

Preliminary volume estimates were 284,053, down a bit from yesterday’s total of 314,035.

Soybean prices rallied 8.5 cents on positive numbers from Thursday’s USDA “Weekly Export Sales” report. After factoring in moderate old-crop cancellations, new-crop sales boosted the total volume to 59.1 million bu.

USDA also announced Thursday morning that additional new-crop sales to China under its daily reporting system total 4.85 million bu.

November 2017 prices moved steadily higher throughout the day before settling at $9.465. Preliminary volume estimates were 141,255 -- sluggish compared to Wednesday’s totals of 195,690.

Argentina is finding itself in a bind after the U.S. Department of Commerce imposed duties of up to 64% of the country’s biodiesel exports. In 2016, 90% of Argentina's biodiesel exports went to the U.S.; now, the country must look to the EU to maintain demand.

Buyers are watching for signs of stress in the U.S. (or later in South America) and face no fundamental supply concerns at this time.

Wheat prices opened at $4.30/bu. and took a tumble before rebounding back into the green midmorning and closing at $4.3425. Looking longer term, however, large global supplies are impeding progress for a seasonal rebound after futures prices have fallen consistently since the beginning of July.

New selling didn’t develop after posting new contract lows earlier in the week. That inability to trigger new selling is likely prompting some short covering. Overseas trading saw a mixed bag, with January futures for eastern Australian wheat down 8.6 cents to $5.178 and December futures in the Paris, France, morning trade flat at $5.156/bu.

Bookings were down to 14.2 million bu. last week. That’s below trade estimates but slightly above USDA forecasts for the rest of the 2017 marketing year. Shipments of 18.4 million bu. were also in line with USDA forecasts.

Preliminary volume estimates came in at 133,564, running just ahead of yesterday’s total of 128,470.

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