Kluis added, “Watch the National Oilseed Processors Association (NOPA) soybean crush report today. That report will show how many bushels of soybeans were crushed in the month of December. I expect another record crush to be reported. With the larger soybean crush, it will be important to see what the report shows for soybean meal and soybean oil inventories.”
—————————
Thursday’s Grain Market Review
On Thursday, the CME Group’s farm markets add to this week’s gains.
At the close, the March corn futures finished 9¾¢ higher at $5.34½. May corn futures closed 10¢ higher at $5.37½.
March soybean futures settled 24¼¢ higher at $14.30¼. May soybean futures ended 24¢ higher at $14.27¾.
March wheat futures closed 9½¢ higher at $6.70.
March soymeal futures finished $7.80 short term higher at $464.90.
March soy oil futures closed 0.93 higher at 43.11¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.67 per barrel higher (+1.27%) at $53.58. The U.S. dollar is higher, and the Dow Jones Industrials are 40 points higher (+0.13%) at 31,100 points.
On Wednesday, private exporters reported to the USDA export sales of 464,300 metric tons of soybeans for delivery to unknown destinations. Of the total, 396,300 metric tons is for delivery during the 2020/2021 marketing year and 68,000 metric tons is for delivery during the 2021/2022 marketing year.
The marketing year for soybeans began Sept. 1.
Al Kluis, Kluis Advisors, says that the market is building in rationing.
“The price rationing that needs to be done in the corn market is starting. The Energy Information Agency report yesterday showed corn used for ethanol down 14% from last year. If this trend continues, then it will reduce corn used for ethanol by over 500 million bushels. Also of concern yesterday is that even with the drop in ethanol production, ethanol stocks increased by 408,000 gallons,” Kluis stated in a daily note to customers.
Kluis added, “I see no slowdown in export demand for corn and soybeans at this time.”
———————-
Wedenesday’s Grain Market Review
On Wednesday, the CME Group’s corn market finished off its highs.
At the close, the March corn futures finished 7¼¢ higher at $5.24. May corn futures closed 8¾¢ higher at $5.27.
March soybean futures settled 12¢ lower at $14.06. May soybean futures closed 10¢ lower at $14.03¼.
March wheat futures closed 4½¢ lower at $6.60¾.
March soymeal futures settled $8.30 short term lower at $457.10.
March soy oil futures settled 0.45¢ lower at 42.18¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.16 per barrel lower (-0.30%) at $53.05. The U.S. dollar is higher, and the Dow Jones Industrials are 67 points higher (+0.22%) at 31,135 points.
On Wednesday, private exporters reported to the USDA export sales of 464,300 metric tons of soybeans for delivery to unknown destinations. Of the total, 396,300 metric tons is for delivery during the 2020/2021 marketing year and 68,000 metric tons is for delivery during the 2021/2022 marketing year.
The marketing year for soybeans began Sept. 1.
Al Kluis, Kluis Advisors, says that the outside investors could have a say in the future direction of grain prices.
“The huge rally in the corn market continues, and futures are sharply higher again tonight. On Tuesday, the grain markets exploded higher after the release of the bullish USDA Crop Reports. Corn had a 28¢ trading range and closed up the 25¢ limit, soybeans had a 70¢ trading range and closed 46¢ higher, while wheat futures closed 15¢ to 30¢ higher,” Kluis stated in a daily note to customers.
Kluis added, “The soybean ending stocks projection by the USDA at 140 million bushels is still too high. Exports were increased by 30 million bushels to 2.230 billion bushels. To hit that target export sales, we need to average 6 million bushels per week, and this week sales (so far) are at 23 million bushels.”
———————
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s corn market hits its daily trading limit, as a result of the bullish USDA report.
At the close, the March corn futures finished 25¢ higher at $5.17¼, the daily limit. May corn futures settled 25¢ higher at $5.19.
March soybean futures finished 45¾¢ higher at $14.18½. May soybean futures closed 43¾¢ higher at $14.13¾.
March wheat futures finished 30½¢ higher at $6.65¾.
March soymeal futures closed $18.60 short term higher at $465.40.
March soy oil futures ended unchanged at 42.63¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.84 per barrel higher (+1.61%) at $53.09. The U.S. dollar is lower, and the Dow Jones Industrials are 68 points higher (+0.22%) at 31,077 points.
On Tuesday, private exporters reported to the USDA export sales of 120,000 metric tons of soybeans for delivery to unknown destinations during the 2020/2021 marketing year.
The marketing year for soybeans began Sept. 1.
In today’s USDA Reports, investors are expecting to see the government drop corn and soybean carryouts to multiyear lows.
Jack Scoville, PRICE Futures Group, says that no matter how you look at it, any kind of a drop – even a small drop – in ending stocks for soybeans will make the USDA Reports bullish.
“The last time we had ending stocks this low we traded to significantly higher prices. I have a hard time thinking USDA will go that low, but they could. I think a small cut is in order but USDA will not likely show the big crop. That is not in their history,” Scoville says.
Scoville added, “I will be watching both the beans carryout and the corn carry out. And the South American estimates for any drop at all in production. Corn could really drive higher with a bullish estimate and beans too.”
Today’s report is considered a big one and will be felt for longer than five minutes, Scoville says.
“We could go either way based on the numbers, although I tend to think up is more likely. I think the market will be supported on breaks due to the overall situation, even if USDA finds a bit more beans,” Scoville says.
Peter J. Meyer, S&P Global Platts, head of grain and oilseed analytics, says that after a year like 2020, it is very difficult to predict production changes.
“However, I would expect minimal changes in both corn and soybeans. On the demand side of soybeans, we may see a 50-million-bushel increase in exports given the pace of sales. With no changes in supply, that would put carryout at 125 million bushels. Hard to see a carryout lower than 100 million given the pace of total demand, but it was 2020 after all, so anything is possible,” Meyer says.
Meyer added, “It is becoming increasingly difficult to forecast market reaction given the Fund length in soybeans, meal, and soy oil. Then again, there’s very little for sale by the producers in old crop. It’s going to take a lot to move higher given the positioning of the funds. I’m guessing a knee-jerk higher after the report.”
Investors will be watching changes to Argentina/Brazil production in both corn and soybeans, as they should be bigger market drivers than U.S. balance sheets, Meyer says. “The market will trade this data until the USDA’s Outlook Forum in late February when initial acreage estimates will be released. U.S. acreage expectations will be the key driver after the January WASDE in our opinion,” Meyer says.
Al Kluis, Kluis Advisors, says that the outside investors could have a say in the future direction of grain prices.
“The CFTC report showed funds cutting back on their long position in soybeans. The open interest increase shows commercial buying was again the driving factor in corn and soybeans, but the net position was less than expected. If funds jump back in in a big way, then it can take prices higher. Farmers are not reluctant sellers,” Kluis stated in a daily note to customers.
Kluis added, “Watch the price where the January soybean meal contract expires Thursday. We thought that meal prices would set back due to the end of the union strike in Argentina. Instead, prices rallied to new contract highs and closed at a $6 premium to the March contract. The gain in the nearby contract as it approaches expiration is a positive sign for meal demand. The next resistance on the chart is at the 2014 high at $463 per ton.”
——————–
Monday’s Grain Market Review
On Monday, the CME Group’s farm markets close lower.
At the close, the March corn futures settled 4¢ lower at $4.92. May corn futures are 3½¢ lower at $4.94.
March soybean futures closed 2¼¢ lower at $13.72. May soybean futures ended 1¼¢ lower at $13.70½.
March wheat futures closed 4¢ lower at $6.34¾.
March soymeal futures ended $7.20 short term higher at $446.80.
March soy oil futures closed 0.96¢ lower at 42.63¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.19 per barrel lower (-0.36%) at $52.05. The U.S. dollar is higher, and the Dow Jones Industrials are 89 points lower (-0.29%) at 31,008 points.
Jack Scoville, PRICE Futures Group, says the markets dropped due to the focus put on tomorrow’s USDA Reports.
“We are down a bit mostly on spec long liquidation before the reports tomorrow. Soybeans have recovered from the early lows, and the chart patterns are still bullish. Wheat is struggling as is corn. Corn is not as bullish as beans, with Argentina allowing exports and the weak U.S. ethanol demand,” Scoville says.
On Monday, private exporters reported to the USDA the following activity:
- Export sales of 132,000 metric tons of soybeans for delivery to China during the 2020/2021 marketing year.
- Export sales of 108,500 metric tons of corn for delivery to Colombia during the 2020/2021 marketing year.
- The marketing year for corn and soybeans began Sept. 1.
Al Kluis, Kluis Advisors, says that the third week of a month’s trading can be telling.
“I am watching the January Soybean contract as we approach contract expiration on Thursday, January 14. In the last few months, prices have rallied into the third week of the month and then pulled back to a low the first week of the month. I am watching to see if that pattern develops again in January and then into early February,” Linneman stated in a daily note to customers.
Kluis added, “On Tuesday, the USDA’s final Annual Crop Production and supply/demand reports will be released at 11:00 a.m. CT. This is one of the most important reports (and days) of the year.”
