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Afternoon Market Recap for Oct. 15, 2018

Soybean futures soar.

Healthy export and crush data gives prices a major lift

A record-breaking September soybean crush and a bullish round of export data was enough to send soybean futures soaring nearly 3% to start the week, with corn and wheat futures also enjoying moderate gains Monday. 

Expect seasonally cool weather to prevail for the rest of this week, with relatively dry weather in store for much of the central U.S. The latest five-day cumulative precipitation map from NOAA shows significant rainfall possible through the Southwest and Mid-South through October 20, however.

Wall St. enjoyed some positive momentum after a moderate selloff last week, with the Dow gaining 111 points in afternoon trading to reach 25,451. Energy prices trended mostly higher Monday, with crude oil and diesel futures up and gasoline futures slightly down this afternoon. The U.S. Dollar softened slightly.

 

Corn prices saw some spillover strength from surging soybean futures, along with some modest short-covering, with December and March futures each gaining 4.5 cents to reach $3.7825 and $3.9025, respectively. 

Corn basis bids were mixed but trended mostly lower across Midwestern locations today. 

Corn export inspections landed at 39.2 million bushels last week, falling moderately below the prior week’s tally of 54.5 million bushels and below the average trade guess, which ranged between 47 million and 59 million bushels. Mexico was the top destination for U.S. corn export inspections, with 14.0 million bushels.

Ahead of Monday afternoon’s USDA Crop Progress report, analysts anticipate corn harvest has reached 40% completion, with crop quality dropping one point to reach 67% in good-to-excellent condition.

European Union corn imports reached 189 million bushels as of October 14, trending 10% higher year-over-year. 

Russia’s 2018 corn harvest has reached 233.8 million bushels as of October 12, down slightly year-over-year. Average yields are 64.7 bushels per acre.

Preliminary volume estimates were for 330,108 contracts, trending slightly higher than Friday’s final count of 307,862.

 

Soybean prices absorbed plenty of bullish factors Monday that added up to nearly 3% gains in the session – from disagreeable harvest weather to a record-breaking NOPA crush and emerging Chinese export sales. November and January futures each gained 24 cents to close at $8.9150 and $9.0575. January futures finished north of $9 per bushel for the first time since mid-July.

Soybean basis bids were mostly steady but slightly mixed at Midwestern elevators Monday, trending 2 cents higher at an Indiana location but down 5 cents at an Ohio elevator.

Ahead of Monday afternoon’s USDA Crop Progress report, analysts expect the agency to report soybean harvest at 40% complete, up from 32% a week ago. Crop quality could fall one point to 67% in good-to-excellent condition. 

Analysts expected the National Oilseed Processors Association to report a record September crush Monday morning, and that anticipation did not disappoint, with NOPA reporting a September crush of 160.779 million bushels – rewriting the record books by 21 million bushels.

 

Soybean export inspections exceeded expectations with 42.5 million bushels last week, nearly doubling the prior week’s tally of 21.8 million bushels and above the average trade guess, which ranged between 18 million and 25 million bushels. Vietnam was the top destination for U.S. soybean export inspections last week, with 5.2 million bushels.

European Union soybean imports for 2018/19 are up 12% as of October 14, reaching 136 million bushels. Soymeal imports are down 18% year-over-year, meantime, with palm oil imports down 10%.

Preliminary volume estimates were for 221,926 contracts, up significantly from Friday’s final count of 135,646.

 

Wheat prices followed corn and soybeans higher, aided by some technical buying to start the week. December Chicago SRW futures gained 7.75 cents, as did December Kansas City HRW futures – climbing to $5.25 and $5.32, respectively. December MGEX spring wheat futures found more modest gains, rising 4.5 cents to reach $6.0050 and closing above $6 for the first time in nearly two months. 

Wheat export inspections reached 16.6 million bushels last week, up slightly from the prior week’s total of 16.4 million and on the high end of the average trade guess, which ranged between 11 million and 18 million bushels. Iraq and the Philippines were the top destinations for U.S. wheat export inspections last week, with 3.8 million bushels each. 

Ahead of Monday afternoon’s USDA Crop Progress report, analysts expect winter wheat planting progress to reach 65%, up from 57% the prior week.

European Union soft wheat exports are down 23% year-over-year, reaching 176.4 million bushels as of October 14. EU barley exports are also down 8% year-over-year.

Russia’s 2018 wheat harvest has reached total production of 2.657 billion bushels as of October 12, down moderately from the pace set in 2017. Average yields are 41.5 bushels per acre.

Syria issued an international tender to purchase 7.3 million bushels of milling wheat, following a season plagued by drought and war that cut the country’s production by around 30%. Syria purchased a similar amount of wheat from Russia last month. 

Jordan issued another international tender to purchase 4.4 million bushels of hard milling wheat that closes October 17.

Preliminary volume estimates were for 62,319 CBOT contracts, moving below Friday’s final count of 83,688.

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