Farm Futures - Afternoon Recap

Afternoon Recap - September 28, 2016

Sept. 27, 2016

Harvest looms as dry weather arrives

Soybean futures turned higher late in Tuesday session while corn and wheat held onto earlier gains as financial markets appeared relieved the first presidential debate was over and that Hillary Clinton would be a steady hand in Oval Office.

Wall Street’s Dow Jones industrials were up more than 100 points in afternoon trading due in part to Clinton’s performance and the dollar held modest gains when the crops closed. Crude oil was more than $1 lower for the day as global producers meeting in Algeria have been unable to agree on a plan to cut production.

Crop fundamentals remain bearish with harvesting under way in much of the Midwest this week and forecasts call for dry weather the next few days.  The seven-day forecast also favors dry conditions for much of the Midwest, while the 6- to 10-day outlook has above-normal chances for rain in Iowa and for much of the northwest quarter of the country.

Exports – USDA, Reuters

-USDA said China bought 4.41 million bushels of 2016/2016 soybeans.

Morocco seeks to buy 303,637 metric tons of U.S. soft wheat. Bids will be opened Oct. 5 and shipments are to arrive in Morocco by Dec. 31.

-Japan seeks to buy 125,775 metric tons of wheat from the United States and Canada. From the U.S. it seeks 412,070 tons of white wheat, 26,400 of hard red winter, and 28,355 for hard red spring. The white and HRW wheat are for Oct. 21-Nov. 20 loading and the spring wheat arrival by Dec. 21.

-Jordan seeks to buy 100,000 metric tons of each of optional-origin hard wheat and feed barley. The deadline is Wednesday for wheat offers and Thursday for barley offers.

Corn

Corn finished higher in light trading to recover some of what it lost on Monday with the December unable to push past resistance at the 20-day moving average.

The drier conditions this week and next week limited gains. USDA late on Monday put the national harvest at 15%, which trailed last year’s 16% and the average of 19%. Grain elevators in central Illinois said harvest was under way today and farmers were bringing in corn.

Ethanol futures were higher for the fifth straight session and are at 2-1/2-month high after a report last week showed declines in production and stocks.

The CBOT estimated Tuesday’s corn futures volume at 180,877, compared with Monday’s actual of 226,310. Open interest on Monday decreased by 642 and that included an increase of 2,356 in December and a decrease of 5,655 in March.

December corn futures closed up 2-3/4 cents at $3.31-3/4 per bushel and March up 2-3/4 at $3.31-3/4.

What to Look For: Quarterly grain stocks will be released on Friday and Farm Futures expects corn stocks at 1.712 billion. A year ago, corn was 1.73 billion.

Soybeans

Soybeans closed higher after the sale of 4.4 million bushels to China. The futures recovered about half of what they lost on Monday.

The export sale was the second this week, with the first one on Monday of 8.8 million bushels going to unknown destinations.

USDA late on Monday put the weekly harvest at 10%, which trailed last year’s 17% and the average of 13%. This week’s dry weather should have harvest gaining traction.

The CBOT estimated soybean futures volume for Tuesday at 233,229, compared with Monday’s actual volume of 163,448. Open interest on Monday decreased by 6,517, which included a decrease of 7,747 in November and an increase of 1,892 in January.

November soybeans closed up 7-1/4 at $9.52-1/2 and January up 7-1/4 at $9.58-3/4.

What to Look For – Current dry forecasts favor the drying of Iowa farm fields. Friday’s grain stocks data are in focus and Farm Futures expects the stocks at 199 million. A year ago they were 191 million.

Wheat

Wheat markets closed higher along with corn and soybeans.

Trading has been light in wheat futures the past few weeks as the U.S. harvest is over and attention has been on corn and soybeans. Forecasts favor dry weather for the Plains this week which should aid winter wheat planting. Soil moisture has been plentiful to help the wheat that has been planted.

Harvest is under way in Brazil and will be soon in Australia. Australia’s big crop is being threatened by excess rain and wire reports on Tuesday had experts there lowering expectations for the size and quality of that harvest. Light showers may reach Black Sea wheat areas where planting has been under way.

The CBOT estimated Tuesday’s soft red winter wheat volume at 75,341 compared with Monday’s actual of 70,582. Open interest on Monday increased by 3,188 and that included an increase of 2,300 in December and a decrease of 32 in March.

Chicago’s December soft red winter wheat closed up 8 cents at $4.04 per bushel and March up 6-1/4 at $4.26. Kansas City’s December hard red winter rose 5-1/4 to $4.19-1/4 and March gained 5-1/4 to $4.36. Spring wheat for December rose 8-1/4 to $5.02-3/4 and March rose 9 to $5.11.

What to Look For – Brazil’s harvest is under way now. Farm Futures expects wheat stocks in Friday’s report at 2.245 billion bushels. A year ago the stocks from a smaller harvest were 2.097 billion


More from Farm Futures:
Weekly Corn Review
Weekly Soybean Review
Weekly Wheat Review


Afternoon Recap by Bob Burgdorfer

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This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results.

 
 
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