By: Ben Potter
Corn closes down another 1.5% Wednesday, with soybeans also in the red
Corn prices hoped to curb dramatic losses seen earlier this week, testing small gains Wednesday morning. But that trend reversed later in the session on some broader economic anxieties, with September futures closing down 1.7%. Soybean prices also saw declines of more than 1% on a round of technical selling and profit-taking. Wheat prices managed to move moderately higher, meantime, on a round of technical buying.
On Wall St., an ominous treasury note trend sparked a major selloff, with the Dow tumbling 668 points in afternoon trading to 25,611. Earlier today, the 10-year treasury note fell below its two-year rate, which has proven to be a reliable indicator of past recessions. That anxiety also helped push safe-haven gold more than 1% higher today. Additional weak economic data coming out of the European Union and China also put energy futures on its heels, with crude oil, gasoline and diesel all falling 2% to 3% this afternoon. The U.S. Dollar firmed slightly.
Slightly below-average daytime highs will remain commonplace across the central U.S. at least into early next week, when some warmer temperatures will reach parts of the Corn Belt. Most of the region will also get a drink in the next three days, per the latest 72-hour cumulative precipitation map from NOAA, with some parts of northern Missouri and southern Iowa adding another 2” or more rainfall through Saturday.
Corn prices saw another round of losses Wednesday on technical selling sparked by broader economic worries and hints of a forthcoming recession. September futures dropped 7 cents to $3.59 and December futures fell 6.25 cents to $3.7025.
Corn basis bids were steady to mixed Wednesday, moving as much as 10 cents lower at an Indiana ethanol plant and gaining as much as 5 cents at a Nebraska processor today.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show corn sales totaling between 7.9 million and 27.6 million bushels for the week ending August 8.
U.S. ethanol production edged higher for a second consecutive week, with a daily average of 1.045 million barrels for the week ending August 9. October futures dropped nearly 2% today, landing at $1.26.
USDA’s National Agricultural Statistics service shocked the market earlier this week by reporting corn plantings at 90 million acres, nearly a million more than last year. But at the same time another wing of USDA, its Farm Service Agency, reported farmers filled prevent plant corn claims of 11.2 million acres. What’s the secret to solving this particular discrepancy? Farm Futures senior grain market analyst Bryce Knorr takes a swing at the situation.
South Korea purchased another 5.3 million bushels of corn from optional origins – likely from the U.S., South America, or South Africa – in two international tenders that closed earlier today. The country has made a flurry of corn purchases after recent price drops. The grain is for delivery in January.
Preliminary volume estimates were for 516,888 contracts, falling well below Tuesday’s massive final count of 999,578.
Soybean prices eroded steadily throughout today’s session on a round of technical selling and profit-taking, turning in nearly identical losses seen yesterday. August futures dropped 11 cents to $8.61, with September futures falling 10.75 cents to $8.6550.
Soybean basis bids were largely steady across the central U.S. Wednesday but did tick a penny higher at an Ohio elevator today.
Ahead of Thursday morning’s USDA export report, analysts expect the agency to show soybean sales totaling between 5.5 million and 25.7 million bushels for the week ending August 8. Analysts also anticipate USDA will report between 175,000 to 400,000 metric tons of soymeal sales, plus another 8,000 to 32,000 MT of soyoil sales last week.
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Preliminary volume estimates were for 113,651 contracts, falling 38% below Tuesday’s final count of 182,793.
Wheat prices endured a choppy session to emerge with modest gains, thanks to some technical buying. September Chicago SRW futures gained 1.75 cents to $4.7375, September Kansas City HRW futures added 2.25 cents to $3.8575, and September MGEX spring wheat futures also picked up 2.25 cents to $5.06.
Ahead of Thursday morning’s export report from USDA, analysts expect the agency to show wheat sales totaling between 7.3 million and 18.4 million bushels for the week ending August 8.
Germany’s association of farm cooperatives expects the country’s 2019 wheat harvest to surpass last year’s drought-stressed tally by 17.5%, reaching 874.9 million bushels. The country’s total grain harvest is expected to climb 21.7% year-over-year.
Taiwan purchased 3.5 million bushels of milling wheat from the U.S. in an international tender that closed earlier today. The grain is for shipment in October.
Japan made offers to purchase 4.4 million bushels of feed wheat and another 9.2 million bushels of feed barley, for arrival by the end of January.
Preliminary volume estimates were for 113,197 CBOT contracts, drifting 32% below Tuesday’s final count of 167,571.