Floor Talk, September 16, 2019
At the close:
At the close, the Dec. corn futures finished 5 1/4¢ higher at $3.74. March corn futures closed 4 1/2¢ higher at $3.86.
Nov. soybean futures settled 1 1/4¢ higher at $9.00. Jan. soybean futures ended 1 1/2¢ higher at $9.13 3/4.
Dec. wheat futures finished 5 1/4¢ higher at $4.88 3/4.
December soymeal futures closed $2.60 per short ton lower at $298.90. December soy oil futures closed $0.85 higher at 30.28¢ per pound.
In the outside markets, the NYMEX crude oil market is $7.48 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 122 points lower.
At midsession, the Dec. corn futures are 4 1/4¢ higher at $3.73. March corn futures are 4¢ higher at $3.85 1/2.
Nov. soybean futures are 1 1/2¢ higher at $9.00 14. Jan. soybean futures are 1 3/4¢ higher at $9.14.
Dec. wheat futures are 5¢ higher at $4.88 1/2. December soymeal futures are $1.80 per short ton lower at $299.70. December soy oil futures are $0.72 higher at 30.15¢ per pound.
In the outside markets, the NYMEX crude oil market is $6.21 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 160 points lower.
Britt O'Connell, Cash Advisor for Commodity Risk Management Group, says that corn is showing nice gains starting on the overnight session and carrying through, here, today.
“With many expecting a bottom firmly in place on corn, short positions are being covered. Your also seeing some outside strength helping support corn. After significant damage was done over the weekend to the Saudi oil fields, oil is reacting with a gap higher overnight of over $5. With the extent of the damage now fully estimated and fears around the larger scale impact that could have from a political perspective. Generally speaking, high oil prices are good for corn,” O’Connell says.
O’Connell added, “Hopeful that this increases ethanol demand. The other large demand sector for corn is cattle. Trading at multi-year lows after the Tyson plant fire in Kansas, it appears as if that market has found some support as well. While we need continued strength in that market, sentiment is turning more favorable.”
China is rumored to have bought 15 cargos of soybeans off the P&W last week with 1.0-3.0 million tonnes rumored to be additional bookings, she says. The 204,000 tonnes have been confirmed as a sale to China last week. Most of this news hit the market last week.
“A bearish weather forecast is going to continue to stare down a bean crop that, while less than last year, still wrestles with burdensome supplies. $9 has a psychological effect and it may not yet be convinced enough to blow thru. ,” she says.
O’Connell added, “It seems that traders are so over the trade war and the rhetoric around it. I believe that until we can see and smell the dry ink on a deal the markets reactions will remain somewhat muted,” O’Connell says.
In today's USDA Weekly Export Inspection Report, all sales came in at the bottom of trade ranges.
Corn inspections, for exports last week, totaled 422,000 tons
Soybean inspections of exports last week totaled 666,000 tons.
Wheat inspections totaled 459,000 tons.
In early trading, the Dec. corn futures are 2¢ higher at $3.70b 3/4. March corn futures are 1 3/4¢ higher at $3.83.
Nov. soybean futures are 1/2¢ higher at $8.99 3/4. Jan. soybean futures are 1/4¢ higher at $9.12 1/4.
Dec. wheat futures are unchanged at $4.83 1/2. December soymeal futures are $0.80 per short ton lower at $300.70. December soy oil futures are $0.29 higher at 29.72¢ per pound. In the outside markets, the NYMEX crude oil market is $5.53 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 108 points lower.
On Monday, private exporters reported to the USDA export sales of 256,000 metric tons of soybeans for delivery to China during the 2019/2020 marketing year.
The marketing year for soybeans began Sept. 1.
Al Kluis, Kluis Advisors, says that investors are squarely focused on crude oil prices and weather.
“After a good close in the U.S. grain last week we are seeing some spill over strength to start out the week. Crude oil futures are up sharply after a drone attack in Saudi Arabia over the weekend. Strength in crude oil should help lend support to most commodities to start out the week,” Kluis told customers in a daily note.
Kluis added, “I think the hot dry weather especially in the eastern Corn Belt will do more damage to the soybean crop than help it. Being forced to shut down more quickly this late in the season I think will cut yield a little more.”