Soybeans plunge 58¢ Friday

Soybeans drop 60¢, corn falls 24¢.

The CME Group’s soybean market plunged to end the week.

At the close, the March corn futures finished 23 3/4¢ lower at $5.00 1/4. May corn futures settled 23 1/4¢ lower at $5.03.

March soybean futures closed 58 1/2¢ lower at $13.11 1/4. May soybean futures settled 57¢ lower at $13.11 3/4.

March wheat futures closed 26 1/4¢ lower at $6.34 1/4.

March soymeal futures settled $16.60 short term lower at $421.60.

March soy oil futures closed 1.16 lower at 42.27¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.15 per barrel lower (-2.16%) at $51.98. The U.S. dollar is lower, and the Dow Jones Industrials closed 179 points lower (-0.57%) at 30,996 points.

Jason Roose, U.S. Commodities, says that there is plenty of market support to go around.

“Improving weather conditions in Argentina, support in the U.S. dollar and harvest in Brazil, and outside investors holding record-long positions, have sent the grains sharply lower with many uncertainties still driving the markets. The weekend’s world weather will be closely watched,” Roose says.

On Friday, private exporters reported to the USDA 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 123,000 metric tons of sorghum for delivery to China.  Of the total, 60,000 metric tons is for delivery during the 2020/2021 marketing year and 63,000 metric tons is for delivery during the 2021/2022 marketing year.

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

Separately, the USDA’s Weekly Export Sales Report Friday shows very strong demand figures for corn and soybeans. Here are the totals:

• Corn = 1.483 million metric tons (mmt.) vs. the trade’s expectations of between 600,000 mmt. and 1.20 mmt.
• Soybeans = 2.641 mmt. vs. trade’s expectations of 750,000 mmt. to 1.50 mmt. Of the total exports, China bought 1.183 mmt.
• Wheat = 329,600 mt.
• Soybean meal = 468,500 mt.

Bob Linneman, Kluis Advisors, says that the market’s buyers may be getting wary.

“This late-day weakness off the highs carried into the overnight session and quickly pushed prices lower. Updates to South American production estimates and availability of exportable grain hit the headlines and gave the bears the upper hand. Prices are approaching important levels of support on the charts. We also need to keep an eye on the new administration and any moves they make that could impact Chinese demand for U.S. grains,” Kluis stated in a daily note to customers.

Linneman added, “If the fundamental picture for corn and soybeans is still friendly, then it would make sense to think the market will find support sooner rather than later. However, for every buyer there needs to be a seller. If the buyers are taking a break after a multimonth bullish trend, then we could indeed see prices slide, even with strong fundamentals.”

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Thursday’s Grain Market Review

On Thursday, the CME Group’s farm markets close higher, but off their daily highs.

At the close, the March corn futures closed 2¼¢ higher at $5.24¼. May corn futures closed 2¼¢ higher at $5.26¼.

March soybean futures ended ¾¢ higher at $13.70¼. May soybean futures closed 1½¢ higher at $13.68¾.

March wheat futures closed 7¢ lower at $6.60¼.

March soymeal futures settled $4.20 short term lower at $438.20.

March soy oil futures finished 0.89¢ higher at 43.43¢ per pound.

In the outside markets, the NYMEX crude oil market is $0.17 per barrel lower (-0.32%) at $53.14. The U.S. dollar is lower, and the Dow Jones Industrials are 44 points higher (+0.14%) at 31,232 points.

Jack Scoville, PRICE Futures Group, says that it’s a rebound session today.

“We started out like a house afire, but gave most of the early rally back. The daily sales of exports helped the upside for sure. I think, overall, the market has more room to rally but the South American weather is better and the harvest of soybeans has just started, so the going will get tougher now,” Scoville says.

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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Tags: corn, grain prices, soybean futures, CME Group, NYMEX, wheat