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GRAIN MARKETS: Futures post gains at end of hard week

Bull-spreading lifts soybeans though volume is light.

Grain futures closed mostly higher on Friday, putting a little positive spin on a week that otherwise was one to forget. Corn, soybeans and wheat also lost ground for the week as markets are still looking for footing following bearish Aug. 10 USDA reports. 

Outside markets had an up-and-down day. Wall Street sold off early on follow-through from Thursday’s heavy losses. Markets turned higher briefly on news White House adviser Steven Bannon was fired. But even hopes for calmer news out of Washington didn’t last, with some indexes lower headed into the close.

The dollar eased again while other safe havens were little changed. The big winner was crude oil, which jumped more than $1.50 a barrel to trade over $48.50.

Corn prices closed higher on Friday, ending near session highs after December futures heled a tick above this week’s 11 ½-week low. The inside day formed another base on charts, though previous attempts to stabilize haven’t lasted.

Rains provided only light relief to the eastern Corn Belt this week, with parts of Iowa also missed. Forecasts call for heavy rains from the Upper Mississippi River Valley into the northern Great Lakes over the next week, but field south of I-70 could again be shorted. 

Volume picked up to end the week, with a little fund buying noted. Initial trade was put at 391,259 contracts, up from 273,066 on Thursday.

Basis firmed this week as farmers held tight to crops. Strength was noted in the export pipeline and in parts of the upper Midwest affect by drought.

Soybeans posted gains for the third session in a row, though November futures weren’t quite able to notch new highs for the week. The market survived mid-day profit taking to finish strong.

Still, volume was thin, with the initial total put at only 149,815 contracts, down from 173,779 on Thursday. Funds were light buyers today, but the Commitment of Traders released after the close showed big speculators adding 19,830 contracts to their net short position as of Tuesday, before the turnaround began.

Bull spreading was noted in soybeans today, with September trading premium November for the first time since June. Basis firmed in some areas feeding the river system on old crop export business though overall terminal bids weakened earlier in the week.

Wheat prices ended mixed today. While profit taking trimmed Minneapolis slightly, winter wheat futures ended higher. Soft red winter wheat held Thursday’s contract lows while hard red winter wheat slipped to a new low before reversing higher.

Rain fell over much of the hard red winter wheat growing region this week, though forecasts for the next week point to drier conditions from southwest Kansas into much of Texas. Rains are starting to fall in the Dakotas, though that could do more harm than good to the spring wheat crop now.

Volume thinned noticeably this week after an uptick as the markets broke earlier in the week. The initial trade in soft red winter wheat was put at 123,233 contracts, down from 179,455 on Thursday. Volume in hard red winter fell to 49,937 compared to 71,289 on Thursday.


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