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Afternoon Market Recap for July 17, 2019

Heat wave can’t revive grain prices

Cooler weather next week had soybeans in the red again Wednesday

There’s an abundance of blistering heat this week, but traders are already eyeing cooler weather expected next week, leading to another round of cuts for soybeans today. Wheat prices also fell amid mounting harvest pressure. Corn, in contrast, held on for small gains on a technical reversal after taking heavy losses earlier this week.

Plenty of hot weather is in store later this week, however, with daytime highs reaching 90°F or more well into Iowa and northern Illinois over the next several days. Much of the central U.S. has been issued excessive heat watches or warnings into the weekend. The latest 72-hour cumulative precipitation map from NOAA shows mostly light rainfall in the Midwest possible through Saturday, although parts of Iowa, Minnesota and Wisconsin could gather another 1.5” or more during this time.

On Wall St., some ho-hum corporate earnings reports kept the Dow in the red today, dropping 63 points in afternoon trading to 27,272. Energy futures fell, with crude oil down nearly 1.5% on news of rising domestic stocks. Gasoline and diesel took more moderate cuts. The U.S. Dollar also fell moderately.

Corn prices inched slightly higher on some light technical buying after landing in the red the past two sessions. September futures added 0.75 cents to $4.36, with December futures ticking 0.25 cents higher to $4.4150.

Corn basis bids were steady to firm Wednesday, rising 1 to 5 cents higher across multiple Midwestern locations today. Farmer sales have been generally slow this week after prices took a hit Monday and Tuesday.

And in the latest Basis Outlook column from Farm Futures senior grain market analyst Bryce Knorr, find out why corn farmers who kept bin doors sealed tight waiting for higher prices are now finally in the driver’s seat. Click here to learn more.

Ahead of Thursday morning’s weekly export report from USDA, analysts expect the agency to show corn sales totaling between 13.8 million and 31.5 million bushels for the week ending July 11.

U.S. ethanol production rebounded moderately for the week ending July 12, moving from a daily average of 1.047 million barrels a week earlier up to 1.066 million barrels. September futures were down about 2% in afternoon trading.

In his latest Fertilizer Outlook column, Farm Futures senior grain market analyst Bryce Knorr says that there are some hints that nitrogen prices could soon trend higher. Click here to learn more about the latest factors in play.

Preliminary volume estimates were for 220,222 contracts, falling 40% below Tuesday’s final count of 365,115.

Soybean prices continue to push lower amid some technical selling this week, as growing conditions are expected to be more favorable next week (never mind the numerous excessive heat warnings currently in play). August futures drifted 5.25 cents lower to $8.8250, with September futures down 5.5 cents to $8.8825.

Soybean basis bids were steady to firm Wednesday, moving 2 to 4 cents higher at two interior river terminals and rising 5 cents higher at two Midwestern processors today.

Ahead of tomorrow morning’s USDA export report, covering the week ending July 11, analysts have a wide range of estimates for soybean sales that stretch from 3.7 million bushels up to 25.7 million bushels. Analysts also expect USDA to report another 50,000 to 300,000 metric tons of soymeal sales last week, plus another 5,000 to 50,000 MT of soyoil sales.

If trade talks with China via phone this week go well, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer indicated they may travel to Beijing next week for another round of in-person talks. Click here to learn more about the latest negotiations.

Preliminary volume estimates were for 127,114 contracts, tumbling 47% below Tuesday’s final count of 239,918.

Wheat prices continued to fade Wednesday on a round of technical selling spurred by harvest pressure, with spillover weakness from other commodities creating additional headwinds. September Chicago SRW futures fell 2 cents to $5.0550, September Kansas City HRW futures dropped 5.25 cents to $4.4175, and September MGEX spring wheat futures dipped 2.55 cents to $5.2775.

Ahead of Thursday morning’s USDA weekly export report, analysts expect the agency to show a lackluster round of wheat sales, with estimates ranging between 7.3 million and 14.7 million bushels for the week ending July 11.

Egypt has purchased 2.2 million bushels of wheat from Russia in a tender earlier today.

Japan received no offers in its latest bid for 4.4 million bushels of feed wheat, which would have been for shipment in late October. The country will post a similar tender next Wednesday.

Preliminary volume estimates were for an anemic 54,572 CBOT contracts, drifting moderately lower than Tuesday’s final count of 77,040.


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