On Thursday, the CME Group’s corn and soybean markets rallied hard.
At the close, the July corn futures closed at its daily limit up of 40¢ at $6.64½. New crop September futures closed 36¢ higher at $5.83¼. December corn futures ended 32½¢ higher at $5.53¼.
July soybean futures closed 33¼¢ higher at $15.36¼. August soybean futures ended 34¾¢ higher at $14.87¾. New-crop November soybean futures closed 30¢ higher at $13.77½.
July wheat futures closed 27¾¢ higher at $6.76½.
July soymeal futures settled $6.50 per short ton higher at $390.30.
July soy oil futures closed $1.13 higher at 66.81¢ per pound.
In the outside markets, the NYMEX crude oil market is +0.44 higher (+0.66%) at $66.65. The U.S. dollar is lower, and the Dow Jones Industrials are 111 points higher (+0.32%) at 34,434 points.
On Thursday, private exporters reported to the USDA export sales of 152,400 metric tons of corn delivery to unknown destinations during the 2021/2022 marketing year.
The marketing year for corn began Sept. 1.
Jack Scoville, PRICE Futures Group, says that the market rally is about China’s corn purchases and a hot/dry summer forecast.
“It’s about both, but primarily China. The news that China might have bought yesterday and that total old-crop cancellations would probably be well less than 1.0 million tons have been key to the price action. We dropped almost $1.40 in the corn market and almost $1.30 in the beans, from the high, which is enough to warrant a correction from oversold territory. And, the China news along with drier weather outlooks have been the bullish trigger for an up move needing to happen,” Scoville says.
Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures for corn. Here are the totals:
- Corn = 6.24 million metric tons (mmt.) vs. the trade’s expectations of 5.9 to 7.0 mmt. Of that total, China bought 5.67 mmt.
- Soybeans = 304,200 mt. vs. the trade’s expectation of 225,000 to 600,000 mt.
- Wheat = 403,300 mt. vs. the trade’s expectations of 200,000 to 600,000 mt.
- Soybean meal = 274,300 mt. vs. the trade’s expectations of 100,000 to 300,000 mt.
Bob Linneman, Kluis Advisors, says that weather remains an uncertainty for the markets.
“Now the burden is on the bulls. The market will want to see consecutive days of higher highs and higher lows to be convinced we are done going lower for at least the short-term. The weather does not appear to be threatening for at least the next two weeks. However, we are far from being able to say the crop is made,” Linneman stated in a note to customers.
Linneman added, “End users who did not have coverage through the summer months should be taking advantage of this pullback in prices. The U.S. balance sheet for old-crop bushels will remain tight. It is likely we will see old-crop basis in the headlines again before the end of summer.”
