markets charts - green with red line phongphan5922/Thinkstock

Afternoon Market Recap for February 22, 2018

Did acreage reports trip grain prices?

USDA releases its initial 2018 acreage estimates for corn, soybeans and wheat

USDA opened its annual Agricultural Outlook Forum with some 2018 grain acre projections, which includes slightly lower corn and soybean acres this year, with wheat acres an estimated 500,000 acres higher than 2017. No major curveballs were thrown, allowing traders to make small technical adjustments on other market factors.

The latest U.S. Drought Monitor, out earlier Thursday, showed the country’s drought footprint easing for a third straight week, from a multiyear high of 67.1% on January 30 down to 59.3% for the week ending February 20. The seven-day cumulative precipitation forecast from NOAA calls for plenty of additional moisture landing across a large portion of the U.S. between now and March 1.

The Dow pushed 188 points higher in midmorning trading Thursday, pushing back near 25,000. Strong performances in tech and industrial stocks anchored the gains. Energy prices were mixed in midmorning trading, with crude oil and diesel prices firming, while gasoline prices remained largely flat and natural gas prices stumbled.

 

Corn prices found slight support in Thursday’s session on a round of technical buying, with March prices adding 1 cent to $3.6675, while May futures gained 0.75 cents to $3.7475.

USDA’s initial forecast for 2018 corn acres landed at 90 million acres, which is 0.2% lower than 2017 acreage. Separate surveys compiled from industry experts by Bloomberg and Reuters averaged 90.12 million and 89.9 million acres, respectively.

Private exporters reported to USDA the sale of 5.1 million bushels of corn for delivery to unknown destinations during the 2017/18 marketing year, which began September 1.

USDA will release its next round of export sales data, and ahead of that report, trade estimates for weekly corn exports for the week ending February 15 range between 39.4 million and 63.0 million bushels. 

South Korea has purchased about 4.7 million bushels of corn, likely sourced from the U.S., in a tender that closed Thursday. The grain is for arrival between May and June.

The International Grains Council by 236.2 million bushels, citing lower yield expectations for Argentina and Brazil.

The second corn planting is underway in Brazil’s state of Parana, reaching 16% complete, versus a pace of 48% a year ago. Production of the state’s second corn crop is estimated at 486.2 million bushels, compared to 483.4 million bushels a year ago.

European Union corn imports for 2017/18 are trending moderately higher year over year. As of February 20, imports totaled 421.2 million bushels, a more than 48% increase from the pace of 2016/17.

Preliminary volume estimates were for 361,592 contracts, down moderately from Wednesday’s final count of 495,774.

 

Soybean prices didn’t receive any bearish acreage news from USDA today but did finish slightly lower on a round of profit taking Thursday. March and May futures each slipped 2.75 cents to $10.3150 and $10.4275, respectively.

USDA’s initial forecast for 2018 soybean acres landed at 90 million acres, which is 0.1% lower than 2017 acreage. Separate surveys compiled from industry experts by Bloomberg and Reuters averaged 90.69 million and 90.59 million acres, respectively.

Private exporters reported to USDA the sale of 4 million bushels of soybeans for delivery to unknown destinations. Of that, 2 million bushels is for delivery during the 2017/18 marketing year and 2 million bushels is for delivery during the 2018-19 marketing year, which will begin September 1. 

Ahead of Friday’s USDA export sales report, trade estimates for weekly soybean exports for the week ending February 15 range between 22.0 million and 40.4 million bushels.

Argentina’s Buenos Aires Grain Exchange is again lowering its production estimates for the country’s flailing 2017/18 soybean crop. The group’s latest weekly crop report has production potential falling from 1.837 billion bushels to 1.727 billion bushels.

As of February 20, EU soybean imports are down 5% year over year. Total imports reached 297.6 million bushels for 2017/18. Palm oil imports are up 5% over the same period.

The Brazilian state Parana has competed 9% of its latest soybean crop (compared to 31% a year ago), with production estimates up very slightly, from 707.7 million bushels to 708.4 million bushels.

Preliminary volume estimates were for 204,576 contracts, down significantly from Wednesday’s final count of 364,298.

 

Wheat prices were mixed, despite USDA’s higher-than-expected 2017/18 acre estimates. Winter wheat contracts traded higher on short-covering, with spring wheat contracts slipping fractionally. March Chicago SRW prices added 4 cents to $4.5125, and March Kansas City contracts were up 4.25 cents to $4.70. March MGEX Spring Wheat prices eased 0.25 cents to $6.01. 

USDA’s initial forecast for 2018 wheat acres landed at 46.5 million acres, which is 500,000 acres higher than 2017 acreage. Separate surveys compiled from industry experts by Bloomberg and Reuters averaged 46.38 million and 46.08 million acres, respectively.

Ahead of Friday’s USDA export sales report, trade estimates for weekly wheat exports for the week ending February 15 range between 9.2 million and 22.0 million bushels.

As of February 20, EU soft wheat exports remain down 19% year over year. Current soft wheat exports for 2017/18 have reached 481.3 million bushels.

Tunisia has purchased around 2.8 million bushels of soft milling wheat and another 1.1 million bushels of barley, sourced from optional origins, in an international tender that closed Thursday.

Jordan has issued another international tender to purchase 3.7 million bushels of hard milling wheat and 4.6 million bushels of animal feed barley, which closes Feb. 27-28. The country has neglected to make purchases in recent months amid complaints over quality controls and payment terms that has reduced participation in the tenders.

Preliminary volume estimates were for 92,759 CBOT contracts, finishing well below Wednesday’s final tally of 172,815.

 

Corn Outlook

Soybean Outlook

Wheat Outlook

 

 

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish