Afternoon Market Recap for Feb. 14, 2020

Corn, soybeans and wheat all crumble in Friday’s session

Grains were mixed but mostly lower this Valentine’s Day, as corn, soybeans and most wheat contracts couldn’t hold onto small overnight gains after a round of technical selling today. Losses were mostly limited by uneven optimism for exports moving forward, but traders will be watching for Chinese purchases to materialize next week after the phase-one trade agreement is enacted tomorrow. Corn and soybeans ended the session down 0.4% to 0.5%, with most wheat contracts absorbing more modest losses.

A winter storm will wind its way across the northern tier of the U.S. this weekend into early next week, bringing some snowy, icy weather with it. Only light accumulations are likely across the central U.S. through Monday, per the latest 72-hour cumulative precipitation map from NOAA. Further out, the agency’s 8-to-14-day outlook calls for mostly above-normal temperatures between February 21 and 27 for the central U.S., with some drier-than-normal conditions also probable.

On Wall St., investors are still skittish over the potential fallout from China’s coronavirus, triggering some selling that pushed the Dow down 86 points in afternoon trading to 29,337. Still, the Dow is on pace for gains of 1% or more this week. Energy futures were mixed but mostly higher, with crude oil creeping up towards $52 per barrel, and diesel adding 0.7%. Gasoline traded lower earlier today but moved slightly into the green this afternoon. The U.S. Dollar saw fractional gains.

Grain markets will be closed Monday, February 17, in observance of Presidents Day. USDA’s weekly grain export inspection and export sales reports will be released a day later than typical. And tune back into Farm Futures first thing Tuesday morning for our next round of grain market commentary.

Corn prices slid moderately lower Friday on some technical selling, with March futures down a total of 1.4% this week. Today, March futures lost 1.75 cents to $3.7775, with May futures down 2.75 cents to $3.82.

Corn basis bids firmed 2 cents higher at two Midwestern processors Friday, holding steady across other locations in the central U.S. today.

Chinese buyers were thought to have purchased between 7.9 million and 19.7 million bushels of corn from Ukraine earlier this week. “Sales of Ukrainian corn to China take place regularly but it is raising eyebrows that China continues to buy in Europe, despite the coronavirus, instead of in the U.S. despite the Phase 1 trade deal,” according to one European trader.

Meantime, China has sold nearly 52 million bushels of corn to feed processing firms in its southern provinces to shore up supplies and keep production moving forward in the wake of the coronavirus outbreak.

Algeria purchased 1.4 million bushels of corn from optional origins (but likely sourced from the European Union or Ukraine) in a tender that closed yesterday. The grain is for shipment in late March.

Canada’s Parliament still has to approve the USMCA trade agreement, and its bill to approve is still likely weeks away from being signed into law. Click here to catch up on the latest updates to this crucial trade deal.

In case you missed it earlier this week, Farm Futures released the results of its latest grower survey, with more than 700 respondents sharing their opinions on a variety of topics ranging from agricultural economics to politics. Click here to dig through the results.

Corn speculators increased their net short position by another 14,761 contracts to reach 117,187 for the week ending February 11.

Preliminary volume estimates were for 444,346 contracts, climbing slightly ahead of Thursday’s final count of 415,094.

Soybean prices followed corn lower on a round of technical selling Friday, giving up small overnight gains heading into today’s session. March futures dropped 2.5 cents to $8.9375, while May futures fell 2.75 cents to $9.0325. For the week, March futures still hung on for fractional gains after opening at $8.93 Monday morning.

Soybean basis bids were mostly steady across the central U.S. Friday but saw a boost of between 4 and 10 cents at three Midwestern locations today.

Big estimates for Brazil’s 2019/20 soybean crop continue to pour in, the latest being from Abiove, which predicts a total production of 4.545 billion bushels – trending 0.7% above its January forecast and reaching record-breaking levels, if realized. Abiove cut its forecast for Brazilian soybean exports by 2% last month, however, to 2.701 billion bushels.

President Donald Trump released his administration’s proposed fiscal budget for 2021, which would “cut both mandatory and discretionary funding for the U.S. Department of Agriculture and other federal agencies while boosting spending on infrastructure and defense initiatives,” according to Farm Futures policy editor Jacqui Fatka. That includes slicing crop insurance funds by almost $25 billion. Click here to learn what else could be on the chopping block.

Soybean speculators increased their net short position by 5,488 contracts to reach 101,189 for the week ending February 11.

Preliminary volume estimates were for 268,987 contracts, spilling significantly below Thursday’s final count of 397,373.

Wheat prices took a small dip Friday on some technical selling, following corn and soybeans lower today. March Chicago SRW futures fell 1.5 cents to $5.4275, March Kansas City HRW futures held steady at $4.66, and March MGEX spring wheat futures dropped 1.25 cents to $5.2525.

French consultancy FranceAgriMer reported that 65% of the country’s soft wheat crop is in good-to-excellent condition through February 10, steady from a week ago but significantly lower than 85% at this time a year ago.

CBOT wheat speculators shed 7,867 contracts for the week ending February 11 but still hold a net long position of 13,784 contracts.

Preliminary volume estimates were for 143,974 CBOT contracts, falling moderately below Thursday’s final count of 171,766.


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