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Afternoon Market Recap for Oct. 23, 2018

Corn fights for fractional gains.

Soybeans slightly down, with wheat mixed on technical maneuvering

A round of technical maneuvering left grain prices mixed Tuesday, with corn finishing fractionally higher, soybeans suffering small losses and wheat narrowly mixed in the session as traders hold for additional weather, trade and export cues to emerge. Most contracts failed to move more than 0.2% in either direction today.

Weather for the rest of the week presents an “East versus West” divide on temperatures, with the Midwest more likely to see slightly cooler-than-normal temperatures and the Plains more likely to see slightly seasonally warm weather for the next several days. The latest seven-day cumulative precipitation map from NOAA shows most of the central U.S. will see some light rain or snowfall between today and October 30, with more moderate precipitation likely along the Gulf Coast and Atlantic.

Weak earnings forecasts from 3M, Caterpillar and other key industrial stocks left Wall St. feeling bearish, with the Dow tumbling about 500 points earlier Tuesday and rebounding to nearly 300-point losses to reach 25,030 this afternoon. Energy futures took a tumble, too, with crude oil down 4.5% this afternoon to hover above $66 per barrel. Diesel and gasoline were also down around 3%. The U.S. Dollar softened slightly, while safe haven gold firmed by nearly 1%.

 

Corn prices carved out miniscule gains Tuesday after some light technical buying. December and March futures each inched 0.75 cents higher to reach $3.7025 and $3.8250, respectively.

Corn basis bids benefited from relatively slow farmer sales in some locations, spiking as much as 20 cents higher at an Illinois processor but dipping 2 cents lower at two Midwestern river terminals Tuesday.

Corn harvest progress nearly reached the halfway mark last week, at 49% complete as of October 21, according to Monday afternoon’s USDA crop progress report. That remains moderately ahead of 2017’s pace of 37% and slightly ahead of the five-year average of 47%.

Corn crop quality remains at 68% in good-to-excellent condition, unchanged from the week prior. Another 20% of the crop is rated fair, with the remaining 12% rated poor or very poor. 

Ukraine’s 2018 corn harvest is 62% complete, with production totaling 767.7 million bushels so far on average yields of 104.2 bushels per acre.

Chinese corn imports reached the lowest level in almost two years in September, reaching just 1.6 million bushels last month and tumbling 83.4% year-over-year.

South Korea purchased 5.4 million bushels of corn in an international tender that closed Tuesday; the grain is for arrival in March. Analysts say the country purchased more corn earlier this year when prices were relatively lower.

Private Israeli buyers purchased nearly 2.0 million bushels of optional origins corn, sourced from the Black Sea or the U.S, in an international tender that closed last week. The grain is for shipment in January or early February.

Preliminary volume estimates were for 114,513 contracts, shifting significantly below Monday’s final count of 238,257.

 

Soybean prices stumbled slightly Tuesday, with slightly bearish sentiment over U.S.-China trade relations ever-present in the background. Some technical selling pushed November futures a penny lower to $8.5750, while January futures eased 1.5 cents to $8.71.

Soybean basis bids were mostly steady but slightly mixed Tuesday, ticking 2 cents higher at an Illinois river terminal but slipping 2 cents lower at an Indiana elevator. 

Canadian canola futures were down moderately today on an influx of farmer sales, and Paris canola futures and Malaysian palm oil futures also eased slightly.

Soybean harvest progress reached 53% completion as of October 21, according to USDA’s Monday afternoon crop progress report. Farmers made ample progress last week but fall moderately behind 2017’s pace of 67% and the five-year average of 69%. 

Soybean crop quality held steady last week, with 66% of the crop in good-to-excellent condition – despite analysts expecting USDA to dock crop quality a point this past week. Another 23% of the crop is rated fair, with the remaining 11% rated poor or very poor.

Preliminary volume estimates were for 155,156 contracts, down big from Monday’s final count of 242,581.

 

Wheat prices found a small technical bounce today (for the most part) but still hover near three-week lows. December Chicago SRW futures moved a penny higher to $5.09, December Kansas City HRW futures ended the session unchanged at $5.0775, and December MGEX spring wheat futures eased fractionally – down half a penny to $5.8550.

The 2018/19 U.S. winter wheat crop is now 72% planted, up from 65% the prior week but slightly behind 2017’s pace and the five-year average. And 53% of the crop has emerged, up from 44% the week prior. 

Ukraine could turn in its second-largest grain harvest ever this year, with total production of around 64 million metric tons. The country’s Ministry of Agrarian Policy and Food says it could export approximately two-thirds of that total by the end of next June.

Russian consultancy IKAR estimates the country’s 2018 wheat export potential is up about 1.5% from prior estimates, reaching 1.213 billion bushels, with production for this year’s crop surpassing 2.590 billion bushels.

Tunisia issued an international tender to purchase 4.6 million bushels of soft wheat, 1.8 million bushels of durum wheat and 4.6 million bushels of feed barley, which closes Wednesday and is for shipment in January or February.

Japan seeks to purchase 3.8 million bushels of food-quality wheat from the U.S. and Canada, issuing a regular tender that closes Thursday.

China sold about 431,000 bushels of its state reserves of 2013 imported wheat at auction Tuesday, which was just 1.4% of the total available for sale.

Preliminary volume estimates were for 68,513 CBOT contracts, dipping slightly below Monday’s final count of 73,840.

 

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