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CORN, SOYBEANS GAIN BACK WEEK’S PARTIAL LOSSES THURSDAY

USDA ANNOUNCES LARGE DAILY SALES OF CORN AND SOYBEANS.

In early trading, the March corn futures are 6¢ higher at $5.28. May corn futures are 6¢ higher at $5.30.

March soybean futures are 12¼¢ higher at $13.81¾. May soybean futures are 12¼¢ higher at $13.79¼.

March wheat futures are 1½¢ higher at $6.69¼.

March soymeal futures are $1.00 short term higher at $443.40.

March soy oil futures are 0.54 higher at 43.08¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.18 per barrel lower (-0.34%) at $53.13. The U.S. dollar is higher, and the Dow Jones Industrials are 5 points higher (+0.02%) at 31,194 points.

On Thursday, private exporters reported to the U.S. Department of Agriculture the following activity:

  • Export sales of 136,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
  • Export sales of 163,290 metric tons of soybeans for delivery to Mexico during the 2020/2021 marketing year.
  • Export sales of 138,000 metric tons of hard red winter wheat for delivery to Nigeria during the 2021/2022 marketing year.
  • Export sales of 336,500 metric tons of corn for delivery to unknown destinations during the 2020/2021 marketing year.

The marketing year for wheat began June 1; corn and soybeans began Sept. 1.

Bob Linneman, Kluis Advisors, says that investors see a crack in the bears’ armor.

“A few of the bull spreads in both corn and soybeans even traded higher during Wednesday’s trade. This is the first sign the bulls needed to see before feeling comfortable about the slide lower possibly being over. The next step will be to see consecutive days of higher highs and higher lows posted on the daily charts. Grain traders still feel the U.S. export market is strong enough to warrant the USDA making friendly changes in next month’s report,” Kluis stated in a daily note to customers.

Linneman added, “The weekly USDA export sales report is delayed until Friday due to the holiday on Monday. Keep an eye on national basis levels as we progress further into the harvest window for South America. Basis in the U.S. should ease in the short-term once the South American crop hits the pipeline. If U.S. basis continues to tighten, then we are in for a wild spring.”

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Wednesday’s Grain Market Reviews

On Wednesday, the CME Group’s farm markets close lower.

At the close, the March corn futures settled 4¢ lower at $5.22. May corn futures finished 4¼¢ lower at $5.24.

March soybean futures settled 16¼¢ lower at $13.69 3/4. May soybean futures finished 16¢ lower at $13.67¼.

March wheat futures closed 4 1/2¢ lower at $6.67¼.

March soymeal futures finished $8.10 short term lower at $442.40.

March soy oil futures closed 0.84 higher at 42.54¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.30 per barrel higher (+0.57%) at $53.28. The U.S. dollar is higher, and the Dow Jones Industrials are 277 points higher (+0.90%) at 31,207 points.

Britt O’Connell, ever.ag, says that today’s trade has recovered off of its lows and closed toward the top third of today’s trading range.

“South American rains over the weekend put pressure on the markets, as we started the week, causing some follow-through selling as we opened the trade today. Weak longs appeared to be nervous and pushed to the sidelines quickly. With more questions than answers right now on Brazilian and Argentinian yields, the market quickly found buyers. Tight U.S. stocks and strong protein demand from China helped encourage those stepping into the long side. Corn continues to play follow the leader. Without a significant storyline to grab, I don’t see that changing anytime soon. As soybeans go, so goes the grains complex,” O’Connell says.

Al Kluis, Kluis Advisors, says that the soybean market sell-offs have been big, when they happen.

“Since mid-September, we have seen a handful of sell-offs in soybeans. The declines have ranged from 45¢ to 61¢ and lasted between two and seven days from high-to-low. The sell-off from the high last Wednesday to the overnight low (four trading days) is 84¢. The soybean buyers that have been waiting for a pullback – will they jump in now,” Kluis stated in a daily note to customers.

Kluis added, “Keep an eye on export sales reports. There has not been much change in the news to trigger the big sell-off that started yesterday. The supply and demand picture remains in favor of the bulls.”

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Tuesday’s Grain Market Review

On Tuesday, the CME Group’s farm markets close at daily lows.

At the close, the March corn futures settled 5½¢ lower at $5.26. May corn futures closed 6½¢ lower at $5.28¾.

March soybean futures finished 31¢ lower at $13.85¾. May soybean futures closed 31½¢ lower at $13.83.

March wheat futures closed 3¼¢ lower at $6.72¼.

March soymeal futures closed $12.70 short term lower at $450.50.

March soy oil futures finished 0.15 lower at 41.70¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.58 per barrel higher (+1.11%) at $52.94. The U.S. dollar is lower, and the Dow Jones Industrials are 147 points higher (+0.48%) at 30,961 points.

On Tuesday, private exporters reported to the USDA the follow activity:

  • Export sales of 132,000 metric tons of soybeans for delivery to China during the 2021/2022 marketing year.
  • Export sales of 128,000 metric tons of corn for delivery to Japan during the 2020/2021 marketing year.
  • Export sales of 100,000 metric tons of corn for delivery to Israel during the 2020/2021 marketing year.

The marketing year for corn and soybeans began Sept. 1.

Al Kluis, Kluis Advisors, says that investors are digesting the direction of outside money in the grain markets.

“On Friday, the CFTC report was a big surprise. It showed funds reducing their long positions by another 10,000 contracts – on a week when soybeans rallied 41¢ per bushel. It also showed that commercials continue to buy into this rally to cover additional sales to China,” Kluis stated in a daily note to customers.

Kluis added, “I am watching the soybean crush margins. The National Oilseed Processor Association (NOPA) crush report on Friday showed record soybean crush for November. The current pace after just three months shows crush running 43 million bushels above the most recent USDA projection. This report does not show any slow-down in soybean demand.”

 

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