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Afternoon Market Recap for May 22, 2019

Corn rally nearly loses steam.

Prices still closed higher for an eight-consecutive session, however

The latest corn rally nearly ran out of gas Wednesday but managed to finish the session fractionally higher. Prices are now up eight straight sessions. Soybean prices found gains of nearly 1% today on a technical reversal, recapturing nearly all of Tuesday’s losses. But winter wheat prices ran aground on some technical selling and profit-taking, trending more than 1% lower. Spring wheat prices firmed slightly.

This week has seen plenty of severe weather, with nearly 60 tornadoes reported so far. Plenty more rain is in store, with much of the Corn Belt gathering another 1” to 3” through May 27, according to the latest five-day cumulative precipitation map from NOAA. Daytime highs are likely to be cooler than normal through the rest of this week.

Concerns over the prolonged U.S.-China trade war is creating some headwinds on Wall St., with the Dow dropping 76 points in afternoon trading to 25,801. Some analysts are saying “it’s going to get worse before it gets better,” making a trade deal unlikely in the near-term.

Energy futures cratered, with crude oil down more than 2.5% this afternoon on reports of rising domestic imports. Gasoline and diesel followed suit, with both fuels down around 1.5%. The U.S. Dollar softened fractionally.

In the latest Financial Outlook column from Farm Futures senior grain market analyst Bryce Knorr, he notes that there is mounting pressure from the White House for the Federal Reserve to lower interest rates, but such a move is unlikely to come before September. Click here to learn more.

Corn prices picked up fractional gains Wednesday as traders attempted to balance profit-taking with worries over planting delays. July futures firmed by 0.25 cents to $3.9450, and September futures added a penny to $4.0375.

Corn basis bids were mixed Wednesday, moving as much as 5 cents higher at an Illinois processor and falling as much as 4 cents lower at a Nebraska processor today.

Ahead of Thursday morning’s USDA export report, analysts offered a wide range of guesses, expecting the agency to announce corn sales totaling between 9.8 million and 41.3 million bushels for the week ending May 16.

U.S. ethanol production has trended higher for a third consecutive week, reaching a daily average of 1.071 million barrels for the week ending May 17. That also marks the highest weekly production since last August. June ethanol futures were down nearly 2% following EIA’s weekly report.

Grain traveling the nation’s railways rebounded to 23,194 carloads last week. This year’s cumulative total of 440,443 carloads remains 4.2% lower year-over-year, however.

Preliminary volume estimates were for 437,606 contracts, down significantly from Tuesday’s large count of 901,391.

Soybean prices reversed nearly 1% higher today on some technical maneuvering and gaining back around two-thirds of Tuesday’s losses. July futures added 6.5 cents to $8.2850, with August futures up 6.75 cents to $8.3550.

Soybean basis bids were largely steady to firm Wednesday, moving 1 to 5 cents higher across multiple Midwestern locations today. An Illinois river terminal bucked the trend after dropping 2 cents lower.

Private exporters reported to USDA the sale of 4.8 million bushels of soybeans for delivery to unknown destinations. Of the total, 84% is for delivery this marketing year, with the remainder for delivery in 2019/20.

Ahead of tomorrow morning’s USDA export report, analysts expect the agency to show soybean sales totaling between 3.7 million and 29.4 million bushels for the week ending May 16. Analysts also expect USDA to report 75,000 to 400,000 metric tons of soymeal sales last week, plus another 4,000 to 25,000 MT of soyoil sales.

USDA is also promising details on the new farming support program in the near future, but a statement from the agency late yesterday signaled that “farmers should continue to make their planting production decisions with the current market signals in mind, rather than some expectation of what a farming support program might or might not look like based on inaccurate media stories.”

Preliminary volume estimates were for 154,331 contracts, down substantially from Tuesday’s final count of 345,173.

Wheat prices were mixed but mostly lower Wednesday on a round of technical selling spurred by the usual suspects (large domestic and global stocks, plus worries over export demand). July Chicago SRW futures dropped 6 cents to $4.7275, July Kansas City HRW futures fell 4.5 cents to $4.3150, and July MGEX spring wheat futures inched ahead 0.75 cents to $5.4325.

Analysts have mixed expectations for wheat sales last week, sharing estimates totaling between zero and 25.7 million bushels ahead of Thursday morning’s USDA export report.

The Philippines purchased 1.7 million bushels of animal feed wheat from Australia in a deal earlier this week, for delivery in early September.

Jordan made no purchases in its last tender for 4.4 million bushels of milling wheat from optional origins but issued a new one for the same amount today, which closes May 28.

Preliminary volume estimates were for 88,095 CBOT contracts, which was nearly half of Tuesday’s final count of 168,323.

Closing commodity prices, May 22, 2019

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