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Afternoon Market Recap for Dec. 12, 2018

Hot soybeans continue winning streak.

Nearly miss bid to make six-month highs; corn and wheat also finish higher

President Donald Trump declared China was already “buying tremendous amounts of soybeans” from the U.S., with some corroborating reports from two anonymous traders, but grain markets may be waiting for the receipts, as soybean futures racked up only modest gains in Wednesday’s session. Corn firmed fractionally on some light spillover strength. Wheat contracts, incidentally, grabbed the biggest gains today on some short-covering as speculators prepare for a potentially bullish round of USDA export data, out Thursday morning.

Warmer-than-normal weather will continue to soak up the Midwest and Plains for the next several days. As for precipitation, the latest three-day cumulative map from NOAA shows most areas east of the Mississippi River will get some additional rain or snow over the next 72 hours, with the Dakotas and Minnesota also getting very small amounts of additional moisture during this time.

On Wall St., financial and industrial stock gains led to a big boost for the Dow, which was up more than 400 points in afternoon trading to 24,793. Investor optimism over U.S.-China trade negotiations is driving a lot of the positive momentum. Crude oil, gasoline and diesel were all up moderately this afternoon on news that OPEC lowered its crude oil production in November. The U.S. Dollar softened moderately.

 

Corn prices enjoyed a small dose of spillover strength from higher soybean and wheat futures. December futures added 1.25 cents to $3.7625, with March futures up 0.5 cents to $3.8525. 

Corn basis bids were steady to weaker across the central U.S. today, slipping 1 cent lower at an Iowa processor and dropping 3 to 4 cents lower at several river terminal locations today. 

Ahead of Thursday morning’s weekly USDA export report, analysts expect the agency to show corn sales totaling between 39.4 million and 59.1 million bushels for the week ending December 6.

French consultancy FranceAgriMer lowered its outlook for the country’s 2018/19 corn ending stocks by 5% to 74.8 million bushels. 

Preliminary volume estimates were for 257,911 contracts, up modestly from Tuesday’s final count of 235,050.

 

Soybean prices took another round of modest gains today, as optimism over U.S.-China trade negotiations continue. January and March futures each added 5 cents to close at $9.20 and $9.3325, respectively. Prices have risen about $1 per bushel since mid-September.

Soybean basis bids were largely steady Wednesday, with one Illinois river terminal dropping 2 cents lower today. 

Two traders reported to Reuters earlier today that Chinese state-owned companies have purchased at least 18.4 million bushels of U.S. soybeans but did not offer a lot of additional details at this time. The purchases are said to be worth at least $180 million.

Private exporters also reported two large soybean sales to USDA today. One was for 4.8 million bushels for delivery to Mexico during the 2018/19 marketing year (which began September 1), and the other was for 4 million bushels for delivery to unknown destinations in 2018/19. 

Ahead of Thursday morning’s weekly USDA export report, analysts expect the agency to show soybean sales totaling between 25.7 million and 36.7 million bushels for the week ending December 6.

Analysts also anticipate USDA will show between 225,000 and 450,000 metric tons of soymeal sales last week, plus another 5,000 to 25,000 MT of soyoil sales. 

Iran issued an international tender to purchase 60,000 metric tons of soyoil, for shipment next February or March. The tender’s deadline is January 15.

Preliminary volume estimates were for 207,793 contracts, down fractionally from Tuesday’s final count of 208,261.

 

Wheat prices moved higher on some technical buying amid hopes that tomorrow morning’s USDA export report will bring another round of substantially above-average wheat sales. March Chicago SRW futures gained 5.5 cents to $5.2650, March Kansas City HRW futures added 5.75 cents to $5.1050, and March MGEX spring wheat futures rose 7.75 cents to $5.8325. 

Ahead of Thursday morning’s USDA export report, analysts are expecting another healthy round of wheat sales, totaling between 18.4 million and 29.4 million bushels. The prior week’s tally of 26.2 million bushels placed it 58% ahead of the four-week average.

French consultancy FranceAgriMer fractionally raised its forecasts for 2018/19 soft wheat exports outside the European Union to 323 million bushels. The group raised its forecast for France’s soft wheat stocks at the end of 2018/19 by 8% to 99.2 million bushels. 

Egypt purchased 6.6 million bushels of what in an international tender Wednesday, for shipment in early February. About two-thirds of the total was sourced from Russia, with the remainder coming from Romania.

Iraq purchased 1.8 million bushels of U.S. wheat in an international tender that closed last week, with a request that offers remain open until December 11.

Jordan made no purchases in its international tender for 4.5 million bushels of milling wheat that closed Wednesday. The country has made very few wheat and barley purchases in recent months amid reduced seller participation.

China sold 5.8 million bushels of its state reserves of wheat at auction Wednesday, which was 5.3% of the total available for sale.

Preliminary volume estimates were for 80,938 CBOT contracts, down slightly from Tuesday’s final count of 84,603.

 

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