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Afternoon Market Recap for April 25, 2018

Midweek markets see green.

Some weather and trade news falls in grain’s favor Wednesday

It’s spring, and corn planters are rolling – just maybe not fast enough for the grain market’s taste. Corn prices gained 1% or more Wednesday, partly on planting delay concerns. Weather also played a hand in wheat prices today, with unanswered questions about U.S. winter wheat crop size and quality handing nearly 3% gains to some contracts. And optimism over future soybean exports gave those prices a lift, too.

Lots of “planter friendly” weather is probable over the next several days in the central U.S., with daytime highs reaching into the 60s and 70s across large portions of the Midwest and Plains for the rest of this week into the weekend. Some rain – mostly confined to the Mid-South and Southeast – will also roll through over the next several days. Visit www.farmfutures.com/weather for more forecast information and more than 20 agriculture weather maps. 

Increased federal borrowing continues to have investors on edge, with benchmark 10-year bond yields breaking above 3% and the Dow shedding almost 200 points in early morning trading before recovering nearly all losses by mid-afternoon. Energy prices were mixed, with crude oil and diesel grabbing moderate gains as gasoline prices slipped slightly. 

For Wednesday, commodity funds were net buyers of corn (+15,000), soybean (+6,000) and wheat (+10,500) contracts.

 

Corn prices bounced more than 1% higher on planting delay concerns, bolstered by spillover strength from wheat. Trade analysts expect another bullish export report from USDA tomorrow, too. May futures added 5.25 cents to $3.8650, while July futures gained 5.75 cents to $3.9575. 

Improved futures prices pulled corn basis bids an average of 1 to 4 cents higher across multiple Midwestern location Wednesday, with one Iowa ethanol plant spiking as much as 9 cents higher.

Ahead of USDA’s next export report, out Thursday morning, trade analysts expect corn exports for the week ending April 19 to range between 39.4 million and 63.0 million bushels. 

China’s corn acreage for 2018 could drop by more than 815,000 acres, as farmers may switch to soybeans and other legume crops, according to officials at the country’s Ministry of Agriculture and Rural Affairs.

Brazil’s ethanol output in its center-south region totaled 262.3 million gallons during the first two weeks of April, compared to 113.3 million gallons produced during the last two weeks of March.

South Korea opted to make no purchases in its latest international tender for 2.7 million bushels of corn, which closed Wednesday. The tender sought a September arrival.

Grain traveling the nation’s railways last week totaled 25,938 carloads, which was 10.3% more than the same week a year ago. So far in 2018, 264,119 carloads of grain have shipped, which is 1.7% slower than last year’s pace.

Preliminary volume estimates were for 386,249 contracts, up moderately from Tuesday’s final count of 334,953.

 

Soybean prices have been on a bit of a rollercoaster since early March on U.S.-China trade concerns. The latest turn has pushed prices higher, however, with May and July futures each up 5.25 cents on Wednesday to close at $10.2750 and $10.3925, respectively.

And like corn basis bids, soybean basis bids also trended higher Wednesday, moving up 1 to 6 cents across multiple Midwestern locations. Prices remained steady at the majority of locations. 

Ahead of USDA’s next export report, out Thursday morning, trade analysts expect soybean exports for the week ending April 19 to range between 29.4 million and 51.4 million bushels. 

Analysts also anticipate soymeal sales between 100,000 and 300,000 metric tons, with another 8,000 to 30,000 MT in soyoil sales.

The latest International Grains Council estimate for Argentina’s 2017/18 soybean crop is down to 1.396 billion bushels as hot, dry weather has plagued the country’s crops for much of the growing season. Early IGC forecasts had been as high as 2.58 billion bushels for the world’s No. 3 soybean exporter.

Preliminary volume estimates were for 248,975 contracts, down slightly from Tuesday’s final count of 267,011.

 

Wheat prices were up after a round of short-covering guarded against potentially lower-yielding winter wheat crops and possible delays in spring wheat planting. May Chicago SRW prices were up 13.75 cents to $4.8625, May Kansas City HRW prices added 14 cents to $5.26, and May MGEX spring wheat prices nearly made it back to $6, gaining 6.75 cents to $5.9850.

Ahead of USDA’s next export report, out Thursday morning, trade analysts expect wheat exports for the week ending April 19 to range between 1.8 million and 20.2 million bushels.

Russian could export a record 1.470 billion bushels of wheat during its 2018 agricultural season, according to the country’s IKAR consultancy, which estimates wheat exports could account for nearly 77% of the country’s total grain exports this year. 

India could produce a record amount of grains for its 2018/19 crop season, according to the latest projections from the country’s farm ministry. That could include wheat production totaling 3.674 billion bushels of wheat. Rice and oilseeds round out the country’s most common crops.

The latest Argentina wheat planting projections from the country’s Buenos Aires Grains Exchange could total nearly 14.6 million acres for 2018/19. If poor weather conditions prevail during the country’s planting season, acreage could slip to as little as 13.3 million acres. 

China has sold 16 million bushels of its state reserves of wheat at auction Wednesday, which was 21.05% of the total amount available for sale.

Taiwan purchased 3.4 million bushels of milling wheat from the U.S. in an international tender that closed last week. The grain is for shipment starting in early June.

South Korea has purchased 2.3 million bushels of feed wheat from optional origins in a tender that closed Wednesday. The grain will ship between late July and early September.

Receiving just one offer, Jordan opted to make no purchases in its tender for 3.7 million bushels of wheat, which closed Wednesday. 

Preliminary volume estimates were for 130,983 CBOT contracts, down slightly from Tuesday’s final count of 135,298.

 

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

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