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Afternoon Market Recap for July 19, 2019

Soybeans break higher on short-covering

Corn and wheat prices also end Friday’s session with significant gains

Another seesaw week draws to a close on the grain markets Friday, with a round of short-covering lifting soybean prices more than 2% higher today. Some technical buying also helped corn and wheat prices capture similar gains.

Daytime highs across the central U.S. will remain hotter than normal for the next several days before trending significantly cooler than normal by the beginning of next week, particularly across the Plains. The latest 72-hour precipitation map from NOAA shows moderate rainfall likely through Monday in large parts of Missouri, Iowa, Minnesota and Wisconsin.

On Wall St., some positive tech company earnings reports helped the Dow move 35 points higher in afternoon trading to 27,258. Energy futures moved higher on increased tensions in Iran, where the country’s Revolutionary Guard says it has captured a British oil tanker it says was in violation of international marine regulations. Crude oil, gasoline and diesel were all around 1% to 1.5% higher this afternoon. The U.S. Dollar also firmed moderately.

Corn prices found favor Friday on some technical buying partly prompted by spillover strength from soybeans. The current round of hot weather across the central U.S. was also a factor, although traders continue to eye cooler temperatures forecasted for next week. September futures climbed 6.25 cents to $4.3075, with December futures gaining 6 cents to $4.3575.

Corn basis bids were steady to soft Friday, weakening by 1 to 3 cents across multiple Midwestern locations today.

U.S. ethanol plants will likely roll back production later this summer due to weak margins and oversupply amid the ongoing trade war with China. Seasonal supplies are at the highest levels in nearly a decade. August ethanol futures were up 2% in afternoon trading.

Brazil consultancy Safras & Mercado estimates the country’s 2019/20 corn production will fall 3.3% year-over-year to 4.093 billion bushels.

Hot, dry weather is hurting the corn crop in France, with consultancy FranceAgriMer estimating that 74% of the crop is in good-to-excellent condition as of July 15, falling from 78% the prior week.

How did this week’s heatwave impact crop quality in the U.S.? Stay tuned for the next round of USDA crop progress data, out Monday afternoon. So far, corn quality is at its lowest condition since 2012.

Preliminary volume estimates were for 227,686 contracts, shrinking 44% below Thursday’s final count of 403,710.

Soybean prices tracked more than 2% higher Friday on a round of short-covering, with blistering weather across the central U.S. creating additional tailwinds for now. August and November each soared 20.25 cents higher to close at $9.0150 and $9.1925, respectively.

Soybean basis bids were largely steady Friday but did tick 2 cents higher at an Indiana processor and 2 cents lower at an Illinois river terminal today.

Trade talks continued via phone between U.S. and Chinese officials yesterday, but U.S. Treasury Secretary Steven Mnuchin said it was too early to say if the talks went well enough to warrant another round of in-person negotiations: “It’s possible, but I’m not going to speculate on the outcome.”

Brazil consultancy Safras & Mercado expects 2019/20 soybean production to rise 4.7% higher year-over year to reach 4.548 billion bushels. Planted acres are expected to increase another 0.8% this coming season, which begins in September, to reach a record 90.517 million acres, if realized.

“Sometimes what we don’t know is more important than what we do know,” according to Farm Futures senior grain market analyst Bryce Knorr. “For soybeans this year, next to nothing is really certain.” Find out what Knorr’s been investigating lately in his newest Soybean Outlook column.

Meantime, this week has provided plenty of heat that has stressed the soybean crop in many areas. Find out what farmers have been saying in our latest updates to Feedback From The Field, and view our interactive map to learn more.

Preliminary volume estimates were for 173,031 contracts, moving 7% above Thursday’s final count of 161,632.

Wheat prices firmed by as much as 2% Friday on a round of technical buying, with additional support from spillover strength from other commodities. September Chicago SRW futures rose 9 cents to $5.0250, September Kanas City HRW futures gained 7.25 cents to $4.40, and September MGEX spring wheat futures picked up 3.75 cents to $5.2925.

For wheat to muster much of a rally later this year, help will be needed from higher corn prices. Find out what other factors are currently in play in the latest Wheat Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

French consultancy FranceAgriMer reported 73% of the country’s soft wheat crop is in good-to-excellent condition as of July 15, unchanged from a week ago. Harvest progress has reached 33%, up from 9% a week ago. Analysts are expecting total wheat production to top 1.396 billion bushels, which would come in 11.7% higher than a year ago, if realized.

Thailand purchased 2.2 million bushels of U.S. soft white and hard red winter wheat for arrival in September.

Russia plans to send 3.7 million bushels of wheat to Syria as part of a humanitarian aid effort.

Preliminary volume estimates were for 77,326 CBOT contracts, falling 11% below Thursday’s final count of 87,098.

grainstable

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