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GRAIN MARKETS: Mild weather weighs on crop markets

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Spring wheat harvest set to begin.

Forecasts for mild weather in key crop areas next week had crops start lower for the week. The corn and soybean markets were able to trim losses from earlier in the session.

In the corn market, the mild weather offset support from a big export sale of new-crop supplies to Colombia. The other export news was uneventful, with weekly export inspections about as expected for corn and wheat and below expectations for soybeans.

The latest 6- to 10-day (Aug. 6-10) and 8- to 14-day (Aug. 8-14) outlooks released today are cool and wet for much of the country, which could aid corn and soybeans moving through seed development phases. The northern Plains should be dry.

The dollar was lower Monday afternoon and set a new 13-month low. Equities were higher, with the Dow Jones industrials up about 50 points when the crops closed.

Gold was up about 40 cents/oz. Crude oil was higher again and above $50 a barrel for the first time in two months.

Exports (U.S. Department of Agriculture and Reuters data):

-       Weekly export inspections, million bu. (estimate, previous week): corn 38.9 (33-41, 38.7), soybeans 17.5 (12-20, 23.6) and wheat 21.3 (13-21, 18.5).

-       Colombia bought 5.9 million bu. of 2017-18 corn.

-       Iraq tendered to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes on July 31, with offers remaining valid until Aug. 6.

Corn closed a few cents lower in light trading to end recent gains. September and December both stayed well under key moving averages.

Crop condition ratings are due later on Monday, with Farm Futures expecting a slight improvement to 63% good/excellent, while a trade poll average favors unchanged ratings at 62%.

The Chicago Board of Trade (CBOT) estimated volume for Monday at 217,589. Friday’s actual volume was 165,993 Open interest in Friday’s flat market increased by 11,153, with September’s up 1,457 and December’s up 5,269.

September corn settled 3-1/2 cents lower at $3.70-3/4, and new-crop December slipped 3-1/4 cents to at $3.84-3/4.

What to Look For: Corn harvest has begun in the South and should soon gain traction in eastern Texas.

Soybeans had good gains and have recovered much of what they lost early in the week. New-crop November remained lower for the week but is now above key moving averages with an RSI near 57.8.

Farm Futures expects the soybean rating at about 59% good/excellent, while a Reuters poll average has it unchanged at 57%.

Other oilseed markets were lower. Winnipeg, Man., canola for November was lower after recent gains, and Europe’s rapeseed was lower after last week’s two-week high.

CBOT’s estimated volume for Monday was 154,597. Friday’s actual volume was 190,218 and it open interest in the higher market decreased by 716, with August’s down 9,645 and November’s up 6,465.

August closed down 6-1/4 cents at $9.94-1/4, and new-crop November dropped 5-3/4 cents to $10.07-1/4.

What to Look For: The cool weather headed for the Midwest should aid soybeans as they enter seed production.

The wheat markets finished lower as they reclaimed some last week’s late gain. The spring wheat harvest will be starting soon to put fresh supplies on the market.

Farm Futures expects about 7% of the spring wheat may be harvested in this afternoon’s crop progress report. A year ago, 10% was cut.

Forecasts put scattered showers in the northern Plains the next few days and cool and dry weather there next week.

CBOT’s estimated Monday’s volume at 85,548. Friday’s actual volume was 88,324. Open interest in Friday’s firm soft red winter wheat market increased by 2,297, with September’s down 811 and December’s up 3,347. Kansas City, Mo., hard red winter wheat’s actual volume on Friday increased by about 11,000 to 44,292, with open interest up 2,022.

Chicago, Ill., September soft red winter wheat closed down 6-1/2 cents at $4.74-1/2. Kansas City September hard red winter wheat dropped 6-1/4 cents to $4.74-3/4. Spring wheat for September dropped 9-1/4 cents to $7.31-1/4.

What to Look For: Weather will be key as spring wheat heads into harvest. The cool, dry forecasts should aid the wheat in the time leading up to harvest.

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