On Friday, the CME Group’s soybean market topped the $12.00 mark and closed double-digits higher.
At the close, the March corn futures finished 5¢ higher at $4.37 1/2. May corn futures settled 4 1/4¢ higher at $4.39.
January soybean futures closed 18 1/4¢ higher at $12.20 1/2. March soybean futures finished 18 1/2¢ higher at $12.24.
March wheat futures settled 1/2¢ lower at $6.08 1/2.
Jan. soymeal futures closed $7.60 per short ton higher at $405.50.
Jan. soy oil futures finished 0.14 of a cent higher at 40.07¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.58 per barrel higher (+1.18%) at $48.93. The U.S. dollar is higher, and the Dow Jones Industrials are 203 points lower (-0.51%) 30,070 points.
Bob Linneman, Kluis Advisors, says that the farm markets have been fed some bullish news to end the week.
“Grain bulls got a bit of headline momentum to go their way on Thursday, as the weekly export sales data was better than expected for corn and soybeans. This is somewhat surprising, since the daily reports have been quiet. Another catalyst for the grain bulls was the slide in the U.S. dollar under the 90 mark – the lowest level since April 2018. Traders expect the Federal Reserve to continue on its current path of declining the dollar until economic indicators return to comfortable levels,” Linneman stated in a daily note to customers.
Linneman added, “Now that the soybean bulls have been able to break through the $12 resistance level, we should expect to see this level now become support. A pullback in the next couple of days should meet strong support within a penny or two of this mark. If the funds are going to begin adding to their long position in soybeans with the pop over resistance, then will they consider getting long soybeans while getting short corn or wheat at the same time? It is worth noting that seasonal patterns suggest buying soybeans and selling wheat in December.”
Thursday’s Grain Market Review
On Thursday, the CME Group’s farm markets rally late in the session to hit the $12.00 per bushel mark.
At the close, the March corn futures settled 5¼¢ higher at $4.32½. May corn futures ended 5¢ higher at $4.34¾.
January soybean futures closed 17½¢ higher at $12.01¼. March soybean futures finished 17½¢ higher at $12.05½.
March wheat futures finished 10¼¢ higher at $6.08¾.
Jan. soymeal futures settled $3.40 per short ton higher at $397.90.
Jan. soy oil futures closed 0.88 of a cent higher at 39.93¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.51 per barrel higher (+1.07%) at $48.33. The U.S. dollar is lower, and the Dow Jones Industrials are 125 points higher (+0.42%) at 30,279 points.
Jack Scoville, PRICE Futures Group, says that investors are eyeing the soybean market reaching the $12.00 level.
“The bulls are back in charge today, although still not getting beans above $12.00. A great export sales report and more weather concerns, longer term, in South America are the supportive factors. The weather in South America is OK for the moment, but it was previously very dry, and drier trends are forecast to return to at least Argentina and northern Brazil. We’re seeing typical holiday markets, with less trade going on,” Scoville says.
Separately, the USDA’s Weekly Export Sales Report Thursday shows strong demand figures for corn.
- Corn = 1.93 million metric tons vs. the trade’s expectations of between 800,000 mmt. and 1.60 mmt. Unknown was the biggest buyer.
- Soybeans = 1.01 mmt. vs. trade’s expectations of 400,000 mmt. to 900,000 mt.
- Wheat = 561,400 mt.
- Soybean meal = 261,200 mt.
Because federal government agencies will be closed on Thursday, December 24, the scheduled Export Sales Report for the week ending December 17 will be published on Wednesday, December 23, at 8:30 a.m. EST.
Bob Linneman, Kluis Advisors, says that the soybean market may be making a statement, after it failed to push through the $12 mark Wednesday morning.
“It appears the bears are more willing to be big sellers against resistance. They are likely placing stops just above the old highs. What has changed in the last week to push soybean prices 50¢ higher than the low seven days ago? Daily export sales reports remain quiet. South American weather has maintained expected forecasts. The most likely catalyst is that some analysts are starting to update production estimates in South America. These updates are proving the early-season dry spots were a problem and, in some areas, continue to be a problem,” Linneman stated in a daily note to customers.
Linneman added, “The likelihood of the $12 mark holding as resistance for much longer seems small if the headlines remain constant. The bull camp started gaining momentum when the bears failed to break January futures below support at the 30-day average.”
Wednesday’s Grain Market Review
On Wednesday, the CME Group’s farm markets move mostly higher.
At the close, the March corn futures finished 2½¢ higher at $4.27¾. May corn futures closed 2¢ higher at $4.29¼.
January soybean futures finished ½¢ lower at $11.83½. March soybean futures closed ¾¢ lower at $11.88.
March wheat futures finished 1¼¢ lower at $5.98¾.
Jan. soymeal futures closed $6.30 per short ton higher at $394.50.
Jan. soy oil futures settled 0.14¢ lower at 39.05¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.23 per barrel higher (+0.48%) at $47.85. The U.S. dollar is lower, and the Dow Jones Industrials are 16 points lower (-0.06%) at 30,182 points.
Al Kluis, Kluis Advisors, says that the grain markets are stuck in a trading range.
“The corn and soybean futures market are in a trading channel. It will take a major surprise or change in the South American weather to break out of the current range market. Soybean processors are making excellent margins while ethanol producers are losing money with $4.00 corn and $1.20 per gallon cash ethanol,” Kluis stated in a daily note to customers.
He added, “I am watching private trade estimates for the crop size in South America. One of my main sources (Michael Cordonnier) has reduced the corn crop in Brazil by 2 million metric tons (mmt) again this week. He reduced the size of the Argentine corn crop by another 1 mmt, and dropped the Argentine soybean crop by 1 mmt. The total corn crop in South America is now down 10 mmt (380 million bushels) from the last USDA report.”
Tuesday’s Grain Market Review
On Tuesday, the CME Group’s farm markets end higher.
At the close, the March corn futures finished ¾¢ higher at $4.24¾. May corn futures finished ½¢ higher at $4.27¼.
January soybean futures closed 14¾¢ higher at $11.84½. March soybean futures closed 14¼¢ higher at $11.88¾.
March wheat futures finished 3½¢ higher at $5.99¾.
Jan. soymeal futures closed $7.50 per short ton higher at $388.20.
Jan. soy oil futures settled 0.46¢ higher at 39.19¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.56 per barrel higher (+1.19%) at $47.55. The U.S. dollar is lower, and the Dow Jones Industrials are 291 points higher (+1.06%) at 30,178 points.
Al Kluis, Kluis Advisors, says that traders are eyeing today’s soybean crush data.
“When the National Oilseed Processors Association (NOPA) soybean crush report comes out this morning, it will show another record crush for the month of November. That will force the USDA to increase its crush projections for soybeans in the next USDA supply/demand report. Soybean crush margins are very good right now. Processors have every incentive to bid up cash and futures to keep making more soybean meal and soybean oil,” Kluis stated in a daily note to customers.
He added, “I am watching the U.S. dollar move lower. The U.S. dollar index is now making new lows for 2020. On Monday, the dollar traded below support at 90.47. Now the next level of support is at the 88.25 low from the first quarter of 2018. The lower U.S. dollar is positive for the overall commodity complex,” Kluis told customers in a daily note.
Monday’s Grain Market Review
On Monday, the CME Group’s farm markets close mostly higher.
At the close, the March corn futures settled ½¢ higher at $4.24. May corn futures ended ¾¢ higher at $4.27¼.
January soybean futures settled 9¢ higher at $11.69½. March soybean futures closed 8½¢ higher at $11.74¼.
March wheat futures finished 18¢ lower at $5.96¾.
Jan. soymeal futures closed $0.40 per short ton higher at $380.70.
Jan. soy oil futures closed 0.49¢ higher at 38.73¢ per pound.
In the outside markets, the NYMEX crude oil market is $0.34 per barrel higher (+0.73%) at $46.91. The U.S. dollar is lower, and the Dow Jones Industrials are 7 points lower (-0.03%) at 30,038 points.
Jack Scoville, PRICE Futures Group, says today’s markets have seen a wild day with buying seen in the overnight markets then collapsing after the reopen.
“At midsession, the markets are coming back a bit. We are still concerned about dry weather and the lack of sizeable Chinese demand in our markets right now. The South American weather is still mostly dry, but some areas are getting some significant rains in northeastern Argentina as well as some areas in central Brazil. Just about all areas are likely to get some rain over the next couple of weeks, but ideas are it will still be dry,” Scoville says.
Scoville added, “The export inspections were strong for beans and improved for corn but wheat was a dog. We need to see the grains start moving along with the beans. I think funds are on both sides of the market and producers are quiet. Industry might be buying a bit but not so sure about that,” Scoville says.
Al Kluis, Kluis Advisors, says that end users are buying on the market dips.
“The setback in grain prices last week brought in a lot of domestic and export demand. The firming basis and spreads are both positive signals for higher grain prices. It looks like commercials are buying when prices move lower and funds are selling,” Kluis told customers in a daily note.
He added, “I am watching the December 2020 to March 2021 corn spread. Today is the last trading day for the December contract, and the December contract is trading at a 4¢ premium to the March 2021 price. The way the bull spreads have started to work again on the recent pullback in the corn market is a positive signal for prices.”