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Afternoon Market Recap for Dec. 11, 2019

Profit-taking causes soybeans to slide.

Corn and most wheat contracts also trend lower Wednesday

Traders ignored another large soybean sale to China, engaging in a round of profit-taking and technical selling instead, which pushed prices down around 1% in Wednesday’s session after reaching near three-week highs yesterday. Corn and most wheat contracts also slid lower on some technical selling, although MGEX spring wheat contracts bucked the overall trend with modest gains today.

It will feel more like winter across the central U.S. as sharply colder-than-normal temperatures settle onto large parts of the Plains and Midwest later this week into the weekend. Some light rain and snow is also possible throughout the region between now and December 16, per the latest five-day cumulative precipitation map from NOAA, although few places will receive significant accumulations during this time.

On Wall St., stocks held mostly steady after the Federal Reserve indicated earlier today it made no changes to interest rates in December and would likely not alter them at all in 2020. The Dow inched 5 points higher in afternoon trading to 27,887. Energy futures tilted lower, with crude oil falling back below $59 per barrel after taking nearly 1% cuts, with diesel and gasoline both trending close to 2% lower this afternoon. The U.S. Dollar softened slightly.

Corn prices tilted around 1.5% lower Wednesday as export worries crept back to the forefront, triggering some technical selling that sent prices falling to the lowest levels since mid-September. Slumping soybean and winter wheat prices created additional headwinds. December futures fell 5.5 cents to $3.5775, with March futures down 5.75 cents to $3.7125.

Corn basis bids were mixed at Midwestern processors Wednesday but ticked 1 to 2 cents higher at two other central U.S. locations today. Farmer sales have remained relatively slow through much of the fall.

Ahead of tomorrow morning’s weekly export report from USDA, analysts expect the agency to show corn sales ranging between 15.7 million and 31.5 million bushels for the week ending December 5. Last week’s tally landed near the middle of those estimates, with 21.5 million bushels.

Ethanol production continued to move higher for eleven straight weeks after reaching a daily average of 1.072 million barrels for the week ending December 6. February futures were down more than 1% this afternoon, to $1.342.

Members of the National Corn Growers Association gathered in St. Louis this week held a news conference Dec. 11 to reflect on the happenings of 2019, focusing on trade and small refinery exemptions. Click here to learn more about the NCGA’s biggest priorities heading into 2020.

Grain traveling the nation’s railways firmed 0.8% last week to reach 23,262 carloads. But as 2019 winds down, cumulative year-to-date totals are down 5.4% from a year ago, with just over 1.058 million carloads.

Preliminary volume estimates were for 198,764 contracts, moving 44% above Tuesday’s final count of 137,649.

Soybean prices ran aground on a round of technical selling and profit-taking Wednesday, although trade optimism remains tentatively positive and export demand has been adequate over the past several weeks. January futures fell 7.75 cents to $8.9350, with March futures down 7.5 cents to $9.08.

Soybean basis bids were narrowly mixed across the central U.S. Wednesday after tilting 2 cents higher at two Iowa processors while slipping a penny lower at two other Midwestern locations today.

Agriculture Secretary Sonny Perdue told reporters earlier this week that the U.S. is unlikely to enact 15% tariffs on $160 billion in Chinese imports starting December 15. If the U.S. delays or rolls back these tariffs, that goodwill gesture could be a major sign that the two countries are nearing the completion of a phase-one trade agreement. President Trump has recently stated that an ultimate agreement may not happen until after the 2020 elections, however.

Private exporters reported two large soybean sales to USDA this morning. The first was for 21.5 million bushels for delivery to China (the largest such sale since April), and the second was for 5.1 million bushels for delivery to unknown destinations. Both sales are for delivery during the 2019/20 marketing year, which began September 1.

Ahead of Thursday morning’s export report from USDA, analysts are expecting another round of fairly robust soybean sales, with estimates that range between 18.4 million bushels and 40.4 million bushels for the week ending December 5. Unless actuals land on the low end of those estimates, totals will best the prior week’s tally of 25.1 million bushels.

Analysts also expect USDA to report another 125,000 to 300,000 metric tons of soymeal sales last week, plus 8,000 to 30,000 MT of soyoil sales.

Preliminary volume estimates were for 281,274 contracts, rising 53% above Tuesday’s final count of 184,264.

Wheat prices were mixed but mostly lower after demand worries amid stiff global competition spurred some technical selling. Chicago SRW contracts were hit the hardest, with March futures falling nearly 1% (4.5 cents) to $5.1925. March Kansas City HRW futures were also in the red today, losing a penny to land at $4.3025. MGEX spring wheat contracts bucked the trend, with March futures inching ahead 0.25 cents to $5.1850.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show wheat sales ranging between 7.3 million and 16.5 million bushels for the week ending December 5. The prior week’s tally was for a tepid 8.4 million bushels.

In Europe, grain lobby Coceral increased its projections for EU soft wheat production by 1.2% from its September estimates to reach 5.328 billion bushels. That would mark a 14.3% improvement over last year’s drought-stressed crops, if realized. Coceral also expects EU barley production to rise 10.9% year-over-year.

USDA’s forecasts for Russian wheat production in 2019/20 are also on the rise, improving 0.7% over its November estimates to reach 2.737 billion bushels. The agency’s estimates for Russian wheat exports this marketing year are now at 1.286 billion bushels.

Taiwan issued an international tender to purchase 3.8 million bushels of milling wheat from the U.S., with a deadline of December 19. The grain is for shipment in February and/or March.

Syria issued an international tender to purchase 7.3 million bushels of soft wheat from Russia, with a deadline for submissions not until January 20.

China sold another 1.3 million bushels of its state reserves of wheat at auction earlier today, which was 1.2% of the total available for sale.

Preliminary volume estimates were for 70,213 CBOT contracts, climbing slightly above Tuesday’s final count of 67,707.


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