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Afternoon Market Recap for December 15, 2017

Export infusion fails to spark rally.

Grain markets still trying to dig out from large global supplies

Four large export announcements Friday morning didn’t provide enough bullish buzz to override current negativity over large global grain stocks. Corn, soybean and winter wheat futures each made small downward adjustments. 

Starting this weekend, much of the Plains and Midwest will see warmer-than-normal temperatures for the next several days. Some areas of the upper Midwest could see small amounts of rain or snow this weekend, with some heavier precipitation arriving in the Mid-South. Over the next seven days, the northern U.S. Plains could reasonably expect average to above-average snowfall for this time of year.

Strength in consumer stocks points to a broad continuing economic recovery. The Dow is set to finish higher for the fourth consecutive week, adding 102 points in midmorning trading to reach an unprecedented 24,659 points. Energy stocks were mixed in morning trading, with crude oil, diesel and gas prices trending higher, but with natural gas and ethanol prices slipping. The U.S. dollar continued its general upward trend since late November, firming slightly. Gold and copper prices also firmed.

 

Corn prices ticked upward on a large export announcement to start Friday’s session, but slid backwards into small losses by the close, hitting new contract lows in the process. March and May futures each ended down a penny to close at $3.4750 and $3.5575, respectively.

Private exporters reported to USDA the sale of 5.3 million bushels of corn for delivery to Costa Rica during the 2017/18 marketing year, which began Sept. 1.

South Korea has purchased 2.7 million bushels of yellow corn and 2.4 million bushels of feed wheat in a private non-tender agreement, sourced from optional origins.

Informa Economics has lowered its forecast of 2018 U.S. corn acres from prior estimates of 91.415 million acres down to 89.675 million acres, which will primarily be converted to soybean acres. 

As for the 2017 U.S. corn crop, Informa estimates yields landed at 176.6 bushels per acre, which is moderately higher than USDA’s latest estimate of 175.4 bushels per acre. Farm Futures and Informa Economics are both owned by Informa PLC.

Corn speculators increased their net short position through Dec. 12 by 35,743 contracts, bringing the total volume to 238,065.

Preliminary volume estimates were for 187,389 contracts, up moderately from Thursday’s final count of 145,936.

 

Soybean prices continue to be driven by weather in South America, where more rain in Argentina’s forecast applies additional downward pressure. Markets were content to make only small adjustments downward to close the week, with January futures losing a half-cent to close at $9.6725, and March futures slid 0.75 cents lower to close at $9.78. 

Private exporters reported two large soybean sales to USDA. The first was for 9.4 million bushels of soybeans for delivery to China, with an additional sale of 4.6 million bushels of soybeans for delivery to unknown destinations. Both sales are for delivery during the 2017/18 marketing year, which began September 1.

U.S. soybean processors increased November crush volume by 1.7% year-over-year., with a total of 163.546 million bushels of soybeans crushed for the month. That’s ahead of trade analyst estimates, which came in at 163.191 million bushels. 

Informa Economics has raised its forecast for 2018 soybean acres from prior estimates of 29.627 million acres up to 91.387 million acres. Informa also estimates 2017 soybean yields are 49.7 bushels per acre, which is slightly higher than the latest USDA estimates of 49.5 bushels per acre.

Soybean speculators switched to a net short position of 8,584 contracts after cutting 39,145 through December 12.

Preliminary volume estimates were for 247,631 contracts, slightly ahead of Thursday’s final tally of 244,700.

 

Wheat prices stalled out with mixed results after markets weighed generally bullish export news with generally bearish supply news. March Chicago SRW futures ended the day unchanged at $4.1825, with March Kansas City HRW futures slipping a half-cent to close at $4.1775. March MGEX Spring Wheat futures picked up 3 cents to close at $6.1975.

Private exporters reported to USDA the sale of 4.8 million bushels of soft red winter wheat for delivery to unknown destinations in the 2017/18 marketing year, which began June 1.

Tunisia has purchased 3.7 million bushels of soft milling wheat, 1.8 million bushels of durum wheat and 2.3 million bushels of feed barley, all sourced from optional origins, in an international tender that closed Friday.

Informa Economics has lowered its winter wheat planting estimates for the 2017/18 U.S. crop, from 31.923 million acres to 31.093 million acres.

CBOT wheat speculators increased their net short position by another 31,162 contracts for a total of 168,186 through December 12.

Preliminary volume estimates were for 70,265 CBOT contracts, down moderately from Thursday’s final count of 84,376.

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

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