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Afternoon Market Recap for Aug. 19, 2019

Better weather pressures grain prices

Corn, soybeans and wheat all see moderate losses to start the week

Grain prices moved moderately higher last Friday, but Monday’s session gave back most of those gains, with improving short-term weather forecasts applying some downward pressure that prompted some technical selling. Corn, soybean and wheat futures all finished around 1% to 1.5% lower today.

Today and tomorrow, excessive heat warnings will plague large portions of the western Corn Belt, Mid-South and Southwest. But later this week and into the weekend, you can expect plenty of below-normal daytime highs to return to large portions of the central U.S. The latest seven-day cumulative precipitation map from NOAA shows a corridor just west of the Mississippi River likely to receive another 1” or more rainfall through August 26, with relatively drier conditions possible elsewhere in the Midwest and Plains during this time.

On Wall St., stocks continue to rebound from a selloff earlier this month, with the Dow trending 272 points higher in afternoon trading to 26,158. Energy futures moved moderately higher after news that Yemen forces attacked an oil facility in Saudi Arabia, which pushed crude oil futures 2.5% higher in afternoon trading to climb back above $56 per barrel. Diesel and gasoline saw more modest gains. The U.S. Dollar firmed slightly.

Corn prices ran aground on some technical selling spurred by better short-term weather forecasts that could help this year’s late-planted crop. September futures dropped 6 cents to $3.65, with December futures down 6.25 cents to $3.7450.

Corn basis bids were mostly steady to mixed across the central U.S. Monday, rising as much as 10 cents higher at an Iowa river terminal today. Gains ranging between 1 and 5 cents were more common across other Midwestern locations, however.

Corn export inspections moved moderately lower week-over-week, meantime, landing at 20.1 million bushels. That was also below analyst estimates that ranged between 22 million and 40 million bushels. Mexico accounted for more than half of the total with 11.6 million bushels.

Ahead of this afternoon’s weekly crop progress report from USDA, analysts expect the agency to report no changes in U.S. corn crop quality from the prior week, with 57% in good-to-excellent condition as of August 18.

Milder temperatures and at least a little rainfall in most areas improved crop ratings last week according to farmers posting observations on Feedback From The Field. But overall yield expectations remain far below USDA’s Aug. 12 estimates as growers wait out the end of a challenging growing season. Click here to read the latest farmer anecdotes and view our interactive map.

Russian corn exports for August are only expected to reach 5.9 million bushels, which would be the lowest monthly total since last September, if realized.

Preliminary volume estimates were for 236,424 contracts, falling moderately below Friday’s final count of 353,250.

Soybean prices dropped around 1.5% Monday on some technical selling after traders considered improved weather forecasts, compounded by expectations that crop ratings held steady this past week. September and November futures each lost 13.25 cents to close at $8.54 and $8.6650, respectively.

Soybean basis bids firmed by 2 to 8 cents at two interior river terminals Monday but fell 2 cents lower at an Indiana processor. Other locations across the Midwest remained unchanged today.

Total soybean export inspections were for 42.6 million bushels for the week ending August 15. That was better than the prior week’s total of 34.7 million bushels and above trade estimates that ranged between 22 million and 40 million bushels. China’s 20.3 million bushels led all destinations.

Ahead of the next USDA crop progress report, out later this afternoon, analysts expect the agency to hold its quality ratings for soybeans steady from a week ago, with 54% rated good-to-excellent as of August 18.

USDA had bullish news for the soybean market in its Aug. 12 supply and demand report, slashing acreage more than expected and tightening its forecast of 2019 carryout. Supplies remain burdensome nonetheless, and more questions than answers could keep a lid on gains for now. Learn more about what other factors are currently in play with the latest Soybean Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

China sold 1.2 million bushels of its state reserves of soybeans at auction earlier today, which was 53.3% of the total available for sale.

Preliminary volume estimates were for 92,792 contracts, landing 14% below Friday’s final count of 108,101.

Wheat prices fell by as much as 1.3% Monday on technical selling and spillover weakness from corn and soybeans. September Chicago SRW futures fell 5.25 cents to $4.6550, September Kansas City HRW futures dropped 4.5 cents to $3.9125, and September MGEX spring wheat futures slipped 0.75 cents to $5.0550.

Wheat export inspections retreated week-over-week after reaching 18.0 million bushels. That was moderately below the prior week’s tally of 26.1 million bushels but in the middle of trade estimates that ranged between 14 million and 22 million bushels. Mexico was the top destination, with 3.7 million bushels.

Ahead of this afternoon’s USDA crop progress report, analysts expect the agency to show 94% of the U.S. winter wheat crop now harvested as of August 18, up from 89% a week ago. Analysts also expect USDA to report 21% of this year’s spring wheat now harvested, up from 8% the prior week.

The end of summer is a season fraught with risk for the wheat market, with additional pressure on the cash market a common occurrence heading into the fall. Prices for both cash and futures can strengthen after that, but typically the advance is modest if the market is in a downtrend, according to Farm Futures senior grain market analyst Bryce Knorr. Click here to learn more in Knorr’s latest Wheat Outlook column.

Russian wheat exports are expected to reach 132.3 million bushels in August, which would be the biggest monthly total since last December, if realized.

Preliminary volume estimates were for 90,394 CBOT contracts, down 13% from Friday’s final count of 103,802.


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