Afternoon Market Recap for March 16, 2018
Rain relief dampens wheat prices.
Soybeans firmer and corn crumbles to end the week
Rain is coming to the Plains. That’s great for the U.S. winter wheat crop – but not so great for winter wheat prices, which tumbled on the latest weather forecasts. Dry weather in Argentina keeps pushing soybean prices higher, meantime, while technical maneuvering cooled corn prices.
Expect seasonally cooler weather – with the exception of the southern Plains – to prevail across most of the central U.S. through the weekend, giving way to warmer temperatures early next week. The latest seven-day cumulative precipitation forecast maps from NOAA show plenty of areas will see at least 1” of rainfall between now and March 23, including most of Nebraska, Kansas, Iowa, Missouri, Illinois and Indiana.
Strong-performing financial stocks helped anchor bullish sentiment on Wall St., with the Dow up 98 points in late morning trading to 25,022. Energy prices were generally higher Friday, with crude oil prices spiking about 1.8% in early afternoon trading to back over $62 per barrel. The U.S. Dollar also firmed slightly.
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For the week, commodity funds were net sellers of corn (-9,500) and wheat (-14,500), and net buyers of soybeans (+17,000), soymeal and soyoil.
Corn prices fell amid more technical selling, with prices cooling slightly this week after hitting seven-month highs earlier this month. May futures fell 4 cents to $3.8250, with July futures dropping 3.5 cents to $3.91. Prices finished the week about 2% lower.
Slower farmer sales didn’t move many corn spot basis bids in either direction, although an Iowa river terminal dipped 1 cent and another Illinois river terminal kicking 10 cents higher.
Importer sales of U.S. corn are at the highest levels since the mid-1990s, with limited availability of South American grain boosting domestic sales. Last week’s corn export total of 102.6 million bushels was not only a marketing-year high for 2017/18, it was the biggest single week volume in 23 years.
Corn exports through the past nine weeks have averaged a historically high 70.9 million bushels per week.
China’s Sinograin has sold about 319,000 bushels of corn at auction Friday, which accounted for 65% of the total grain available for sale.
Grain shipped on the nation’s railways are down compared to 2017 so far this year. With carloads reaching 218,949 this week, year-to-date volume is 5.6% lower than the prior year.
Preliminary volume estimates were for 311,437 contracts, down slightly from Thursday’s final count of 315,256.
Soybean prices gained further traction on Argentina’s dry weather, with May prices up 8.75 cents to $10.4950 and July prices up 9 cents to $10.6025. In a week that saw big swings – both up and down – soybeans managed to finish 0.8% higher to end the week.
Soybean spot basis bids firmed as farmer sales faded, typically up 2 to 4 cents across some Midwestern locations, with one Illinois river terminal trending an anomalous 15 cents higher.
Private exporters reported to USDA the sale of 20,000 metric tons of soyoil for delivery to unknown destinations for the 2017/18 marketing year, which began October 1.
Rosario Grains Exchange in Argentina cut its forecast for the country’s 2017/18 soybean production by 14%, predicting that four months of drought conditions have lowered the crop’s production potential to 1.470 billion bushels – significantly below prior estimates of 1.709 billion bushels.
In Brazil, farmers are exploring how to better use the Panama Canal for possible lower transportation costs and improved access to Asian markets. In 2017, only about 3% of Brazilian soybeans traveled through the canal.
Canola prices kept their current hot streak alive capturing small gains Friday on a weakening Canadian dollar.
Preliminary volume estimates were for 127,570 contracts, falling 35% below Thursday’s final count of 197,382.
Wheat prices saw steep declines Tuesday, with some contracts losing nearly 3%, after forecasts call for some much-needed rains coming soon to some key production states in the Plains. May Chicago SRW prices tumbled 11 cents to $4.6775, May Kansas City HRW prices fell 14.5 cents to $4.99, and May MGEX spring wheat prices dropped 3.25 cents to $6.19.
Winter wheat prices finished 2.2% lower on the week for Chicago contracts and 2.8% lower on Kansas City contracts. MGEX spring wheat futures dropped around 0.6% for the week.
France’s FranceAgriMer reports mixed results for the country’s wheat crop last week, estimating the amount of soft wheat in good-to-excellent condition moving from 81% a week ago down to 80%. However, France’s durum wheat crop improved slightly, with GE ratings moving from 75% to 77%.
Russia’s Agriculture Ministry says its wheat exports for 2017/18 could reach between 1.323 billion and 1.360 billion bushels. Total grain exports could hit 50 million to 52 million metric tons, which is significantly above prior estimates of between 45 million and 47 million metric tons.
Turkey plans to donate as much as 100,000 metric tons of bread flour to Syrian civilians.
Preliminary volume estimates were for 124,919 CBOT contracts, up more than 13% from Thursday’s final tally of 110,077.