After spending Monday in the red, grain markets found a modest rebound on Tuesday on a round of technical buying. Corn led the way by capturing 1.5% gains, with soybeans and wheat also trending 1% or more higher.
Weather across the central U.S. offers a mixed bag over the next several days, with seasonally cool weather in the lower Midwest contrasting with above-average temperatures in the northern Plains and Great Lakes region later this week.
Strong-performing bank stocks and solid corporate earnings helped fuel gains on Wall St. Tuesday, with the Dow up nearly 140 points in afternoon trading to 25,324. Energy futures were mixed, with crude oil and diesel prices down slightly, while gasoline futures ticked moderately higher. The U.S. Dollar also firmed moderately.
Don’t miss the latest Energy/Ethanol Outlook from Farm Futures senior grain market analyst Bryce Knorr to learn more why diesel and propane prices might not get much cheaper in 2019.
Corn prices recovered Monday’s losses and then some on a round of technical buying, moving 1.5% higher by Tuesday’s close. September futures finished 5.75 cents higher to $3.6225, while December futures gained 6 cents to $3.7650.
Prices remain pressured by the threat of a potentially record-breaking U.S. harvest this fall, with USDA last week estimating per-acre yields at 178.4 bpa.
Corn basis bids firmed by 7 to 8 cents at several river terminals but remained steady across most other Midwestern locations Tuesday.
Monday afternoon’s USDA Crop Progress report had the agency lowering its assessment of this year’s corn crop from 71% rated good-to-excellent the prior week to 70%. Crop quality is still trending above 2017’s pace, with 62% of the crop in similar condition this time last year. Another 20% of the 2018 corn crop is rated fair, with the remaining 10% rated poor or very poor.
Physiologically, 73% of the U.S. corn crop has reached dough stage, with another 26% of the crop now denting.
Preliminary volume estimates were for 287,179 contracts, down significantly from Monday’s final count of 431,272.
Soybean prices continued to trend higher Tuesday, picking up another 1% or more in gains. August and September futures each added 11 cents to close at $8.6450 and $8.6825, respectively.
Prices were helped by large soymeal gains of 2.5% or more Tuesday. Soyoil futures eased around 0.5%, meantime.
Soybean basis bids firmed by 8 to 9 cents at several river terminals but remained steady across most other Midwestern locations Tuesday.
USDA lowered its quality assessment for this year’s soybean crop, moving it from 67% good-to-excellent down to 66%. Nearly all of the crop is now blooming (96%), with 84% setting pods. Overall maturity is slightly faster-than-average compared to the pace of 2017 and the five-year average.
Brazilian farmers continue to swap sugarcane acres for soybeans, adding nearly 5 million acres in the past two years. Along with the additional acres, Chinese tariffs on U.S. soybeans could help fuel record Brazilian exports this year.
Preliminary volume estimates were for 159,141 contracts, down significantly from Monday’s final count of 249,018.
Wheat prices moved higher Tuesday, recapturing about half of Monday’s losses on a round of technical buying. September Chicago SRW futures were up 8.25 cents to $5.4175, September Kansas City HRW futures gained 5.75 cents to $5.4650, and September MGEX spring wheat prices rose 3.5 cents to $5.9450.
The spring wheat crop made an uneven quality shift last week, with the percentage of the crop rated good moving higher (62% versus 60% the week prior) but the crop rated excellent moving lower (13% versus 14% the week prior).
Spring wheat harvest is moving along, at 35% complete for the week ending August 12. Winter wheat harvest nears the finish line, meantime, reaching 94% complete.
Egypt purchased 15.4 million bushels of wheat in an international tender, for shipment between late September and early October.
Preliminary volume estimates were for 146,505 CBOT contracts, down moderately from Monday’s final count of 228,202.