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Afternoon Market Recap for July 18, 2019

Improving forecasts slash corn prices again

Wheat also falls on harvest pressure, as soybeans edge higher

Heatwave? What heatwave? Grain markets are already focused on next week’s weather forecasts, which should come in significantly cooler across the Corn Belt. That sent corn prices tumbling another 2.5% Thursday. Wheat prices were also down 2% or more as the pace of harvest marches forward. Soybeans nearly bucked the trend but finished slightly lower ahead of the close on some light technical selling.

A large swath of the central U.S. that stretches from Kansas to Ohio is under an excessive heat warning today. Daytime highs will reach the mid-90s in most of this area. But mid-range forecasts promise cooler weather on the way next week. The latest cumulative seven-day precipitation map from NOAA shows plenty of moisture ahead for the Southeast and Mid-Atlantic through July 25, with 1” to 2” additional rainfall probable in parts of the upper Midwest during this time.

On Wall St., the Dow is on pace for a three-day losing streak after slipping 5 points in afternoon trading to 27,214. A “mixed bag” of corporate earnings reports was partly to blame. Energy futures saw steeper cuts, with crude oil falling back under $55 per barrel on 3.3% losses this afternoon. Gasoline and diesel faced similar declines. The U.S. Dollar softened moderately.

Corn prices continued to crumble Thursday after forecasts signal cooler weather on the way next week, even though much of the Corn Belt is currently sweating out an excessive heat warning for the rest of this week. September futures lost 11.5 cents to $4.2450, with December futures down 11.75 cents to $4.2975.

Corn basis bids were steady to mixed Thursday, slipping 2 to 3 cents lower across multiple Midwestern locations but firming by a penny at an Ohio elevator today.

Corn exports saw 7.9 million bushels in old crop sales plus another 5.2 million bushels in new crop sales for a total of 13.1 million bushels last week. That was slightly behind the prior week’s total of 15.6 million bushels and moderately below trade estimates of 22.6 million bushels.

Corn export shipments reached 26.8 million bushels last week, meantime. Mexico remains the No. 1 destination for U.S. corn export commitments this marketing year, with 31% of the total.

India issued an international tender to purchase an as-yet-undetermined amount of corn, although individual offers need to reach a minimum of 944,000 bushels. The tender closes July 30, with shipment between August and October. India needs additional grain after below-normal rainfall and insect damage lowered its domestic production this year.

China sold 20.6 million bushels of its state reserves of corn at auction Thursday, which was 13.5% of the total available for sale.

China has been slow to make grain purchases over the past several months, meantime, although the country did buy the most U.S. sorghum since April, picking up a little over 2 million bushels that will likely be used as livestock feed.

Producers needing propane to dry what could be a wet corn crop face a similar situation. Record propane production last week is keeping prices weak at a time when they typically are beginning their rise into fall. Learn plenty more energy price trends in the latest Energy/Ethanol Outlook column from Farm Futures senior grain market analyst Bryce Knorr.

Preliminary volume estimates were for 316,888 contracts, up fractionally from Wednesday’s final count of 316,622.

Soybean prices nearly endured a choppy session with fractional gains but spilled over into the red just before the close. August futures fell 1.25 cents to $8.8125, with November futures down 1.5 cents to $8.99.

Soybean basis bids were steady to soft Thursday, declining 2 to 4 cents across multiple interior river terminals and an Ohio elevator today.

Soybean sales tallied 4.7 million bushels in old crop sales plus another 7.3 million bushels in new crop sales last week, for a total of 12.0 million bushels. That was slightly better than the prior week’s tally of 9.6 million bushels but below trade estimates of 14.7 million bushels.

Soybean export shipments fared better, with 33.4 million bushels. Despite China’s lack of activity last week, the country remains the No. 1 destination for U.S. soybean export commitments this marketing year, with 30% of the total.

Amid this week’s heatwave across the central U.S., soybean farmers are reporting fairly wide variations in crop conditions in Feedback From The Field, which is updated regularly. Want to know what’s happening in your area? Click here to read our latest farmer anecdotes and view the interactive map.

Preliminary volume estimates were for 135,032 contracts, tilting slightly lower than Wednesday’s final count of 139,494.

Wheat prices continue to be slashed by technical selling brought on by harvest pressure. September Chicago SRW futures tumbled 12 cents to $4.9350, September Kansas City HRW futures lost 8.75 cents to $4.3275, and September MGEX spring wheat futures dropped 2.25 cents to $5.2550.

Wheat exports moved slightly higher to 12.8 million bushels last week, besting the prior week’s tally of 10.5 million bushels and trade estimates of 11.0 million bushels. Mexico is the leading destination for U.S. wheat export commitments so far this marketing year, with 14% of the total.

Japan purchased 1.9 million bushels of food-quality wheat from Canada and Australia in a regular tender that closed earlier today. The grain is for shipment in September.

Preliminary volume estimates were for 74,956 CBOT contracts, trending 25% above Wednesday’s final count of 59,828.


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