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GRAIN MARKETS: Crop markets get lift after Trump speechGRAIN MARKETS: Crop markets get lift after Trump speech

Post-Trump bounce lifts crops, equities and the dollar.

Bob Burgdorfer 1

March 2, 2017

4 Min Read
GRAIN MARKETS: Crop markets get lift after Trump speech

Corn, soybean and wheat futures closed higher to add to yesterday’s strong gains as they joined other assets in moving higher following President Donald Trump’s Tuesday night speech that promised spending to rebuild the nation’s roads and to help businesses expand and add jobs.

The Dow Jones Industrials were up about 344 points at 21,155 when the crops closed. The dollar rose to a five-week high amid new talk that the Federal Reserve Bank will raise interest rates again. The gains in crops were despite a lack of a major crop news. Weekly export sales are due Thursday, with participants in a Reuters poll expecting similar numbers to the prior week.

Exports – USDA, Reuters:

  • Japan bought 113,167 metric tons of wheat, of which most is from the United States. The rest came from Australia. From the U.S. it bought 36,192 of western white, 24,155 of hard red winter and 25,070 of dark northern spring. Loading is from April 21 to May 20.

  • Israeli buyers want to buy up to 85,000 metric tons of corn, 45,000 of feed wheat and 30,000 of feed barley. The tender closes on Thursday. The deals have a range of shipments depending on origin, but mainly from April to June.

  • Jordan seeks to buy from optional origins 100,000 metric tons of wheat and 150,000 of feed barley. The deadline is March 7 for wheat tenders and March 8 for barley. The wheat if for July 16-Sept.15 shipment and the barley for July 1-31.

  • Weekly U.S. export inspections: corn 57.5 million bushels vs 46 million previous week, soybeans 25.9 million vs 40.2 million and wheat 19.8 million vs 21 million.

  • Libya extended the deadline for offers in its wheat, durum and corn tender to the end of March. It

         seeks 100,000 metric tons of wheat, 50,000 of durum and 75,000 of corn for April-May shipment.

Corn closed higher and above key moving averages. However, it remained within yesterday’s higher range.

Fund buying appeared to be in play for the second day. Open interest is dropping in March ahead of its expiration in two weeks. Traders are focusing on the May, which has had a steady rise in open interest. At the CBOT, there have been no corn deliveries against the March contract.

The Chicago Board of Trade (CBOT) estimated Wednesday’s corn volume at 283,711 compared with Tuesday’s actual volume of 614,538. Open interest in Tuesday’s higher market increased by 19,782 with March’s down 12,832 and May’s up 21,994.

March corn closed up 9 at $3.75-3/4 per bushel and May up 8-1/4 at $3.82. New-crop December was up 7-1/2 at $4.01-1/4. 

What to Look For: River markets remain strong for corn ahead of the navigation opening next week on the upper Mississippi River. Weekly export sales on Thursday are expected to be either side of last week’s 39.7 million bushels in old- and new-crop business.

Soybeans rose nearly 1.6% but remained within yesterday’s higher range. The March closed above key moving averages and finished with an RSI of 56.

In addition to the outside markets, support came from the higher soybean meal and soybean oil. Also, Canadian, European and Malaysian oilseed markets were higher.

Funds were noted buyers for the second day. Last week’s CFTC report showed funds were net sellers but remained net long as of Feb. 21.

Second-day deliveries for March contracts included 565 soybeans, 253 soymeal and 844 soybean oil.

The CBOT estimated Wednesday’s volume at 165,090 compared with Tuesday’s actual volume of 368,293. Tuesday’s open interest increased by 11,139 in the higher market with March’s down 5,050 and May’s up 11,274.

March soybeans closed up 16-1/4 at $10.41-1/4 per bushel and May up 16 at $10.51-3/4. New-crop November rose 14 to $10.32-1/4.

What to Look For: Estimates for Thursday’s export sales ranged from both sides of last week’s combined old- and new-crop business of 16.25 million bushels.

Wheat futures closed higher with Chicago SRW and Kansas City HRW both settling at the top of their respective ranges of the previous day. Weather forecasts favor warm, dry weather next week for winter wheat in the Plains, which should push the crop out of dormancy.

Second-day deliveries against March contracts included 719 for soft red winter and 142 for hard red winter wheat.  

The CBOT estimated Wednesday’s soft red winter wheat’s volume at 137,462 compared with Tuesday’s actual volume of 158,833. Tuesday’s open interest decreased by 1,143 in the higher market with March’s down 4,535 and May’s up 2,809.

Chicago’s March soft red winter wheat closed up 10-3/4 at $4.35-1/2 per bushel and May up 13-1/4 at $4.35-1/2. Kansas City’s March hard red winter up 14-1/4 at $4.65-1/2 and May up 13-3/4 at $4.77-1/4. Spring wheat for March rose 13-1/2 to $5.53-1/4 and May rose 11-1.4 to $5.61-1/2.

What to Look For: Winter wheat will exit winter dormancy soon to put attention on condition reports from the Southern Plains. Combined old- and new-crop weekly export sales on Thursday are expected at 14.7 million to 29.4 million, compared the previous week’s 26 million.

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