Afternoon Market Recap for June 22, 2018
Soybeans finally stop the bleeding.
Bargain buyers attract double-digit gains Friday; corn and wheat mixed.
Soybean futures have slumped more than 13% in the month of June and finally attracted some bargain buying Friday, which lifted prices around 1.75%. Meanwhile, volatile wheat futures tilted lower again, with corn futures finishing just fractionally higher.
Much of the central U.S. will see seasonally cooler weather for the next several days, but NOAA’s Climate Prediction Center is calling for a hotter-than-normal July in its latest monthly outlook for much of the Corn Belt. CPC isn’t predicting a lot of precipitation anomalies next month, although it does expect drier-than-normal weather to be prevalent across the Mid-South and Pacific Northwest in July, with a greater chance of greater-than-average precipitation in the Southwest.
A big boost in energy prices helped Wall St. capture some significant gains, with the Dow climbing more than 150 points in afternoon trading to reach 24,620. Investors were pleased at the prospect of increased oil production, sending those prices surging more than 4% higher Friday afternoon, with August crude oil futures passing back above $68 per barrel. Gasoline and diesel futures also spiked more than 2%. The U.S. Dollar declined slightly.
On Thursday, the Farm Bill squeaked by the U.S. House on a 213-211 vote, with most farm groups reacting positively, calling the progress “a big win” that contains some “much-needed improvements” for agriculture. Take a closer look here at some of the latest reactions in greater detail.
Corn prices finished fractionally higher Friday on some light technical maneuvering, but July futures still lost 0.6% on the week – down a fourth consecutive week. For Friday, July futures added 0.25 cents to $3.5725, while September futures ended the session unchanged, at $3.6650.
Slow farmer sales kept corn basis bids steady to firm Friday, trending 1 to 4 cents higher across several Midwestern locations.
Private exporters reported to USDA two large corn sales Friday. The first was for 4.6 million bushels for delivery to Panama during the 2018/19 marketing year (which begins September 1), and the second was for 5.2 million bushels for delivery to Mexico, split between the 2017/18 and 2018/19 marketing years.
Sources close to the matter expect EPA to propose biofuel blending mandate under the Renewable Fuels Standard totaling 19.88 billion gallons next year, which is 3% above 2018’s levels. The expected proposal is expected to come as early as today.
India’s corn acres in 2018 are expected to be virtually unchanged from a year ago, with the government estimating 2.903 million acres this year versus 2.906 million acres in 2017.
FranceAgriMer continues lowering its assessment of the 2018 corn crop, with the consultancy estimating that 72% of France’s corn crop is in good-to-excellent condition as of June 18 versus 74% the prior week.
China sold another 29.1 million bushels of its state reserves of corn at auction Friday, which was about 18.6% of the total available for sale.
For the week, corn speculators cut their net long position by 49,459 contracts to 35,003.
Preliminary volume estimates were for 308,404 contracts, slipping nearly 25% from Thursday’s final count of 409,701.
Soybean prices attracted bargain buyers Friday after slumping more than 13% so far in June. The specter of crumbling U.S.-China relations remains a threat but took a temporary breather, with prices trending about 1.75% higher on the session. July futures added 14 cents to $8.9450, while August futures added 14.5 cents to make it back to $9.00.
July futures fell another 1.2% for the week.
Soybean basis bids were mostly flat Friday, but did trend 1 to 2 cents higher at two Midwestern processors.
Rain delays could cut India’s soybean acres by more than half this year, with the government currently anticipating around a little less than 525,000 acres, versus nearly 1.3 million acres in 2017.
China sold 19,816 metric tons of its state reserves of soyoil at auction Friday, which was nearly 40% of the total available for sale.
For the week, soybean speculators increased their net short position by 40,948 contracts to 52,390.
Preliminary volume estimates were for 315,873 contracts, up moderately from Thursday’s final count of 250,037.
Wheat prices continued a month fraught with ups and downs by sinking another 1% or more Friday, following a round of technical selling. July Chicago SRW prices fell 4 cents to $4.9125, July Kansas City HRW prices dropped 6.75 cents to $4.8650, and July MGEX spring wheat prices slipped 3.75 cents to $5.4775.
Ukraine’s young winter grain harvest season is underway, reaching about 3.6% complete. The country’s winter wheat harvest so far has averaged 43.3 bpa. Ukraine’s agriculture minister says the country could harvest up to 955 million bushels of wheat in 2018/19, with around 632 million bushels available for export.
Amid dry conditions, FranceAgriMer has again lowered its assessment of France’s durum wheat crop, with the consultancy estimating 68% is now in good-to-excellent condition versus 72% a week ago. It also lowered its estimates of the country’s soft wheat crop, moving it from 76% in good-to-excellent condition a week ago to 75% as of June 18.
For the week, wheat speculators increased their net short position by 25,044 contracts to 36,639.
Preliminary volume estimates were for 129,454 CBOT contracts, dropping moderately from Thursday’s final count of 182,221.