Grains closed lower on Thursday:
Corn – 3 cents/bu (Dec @ 3.98 ½ )
Soybeans – 4 ¼ cents/bu (Jan @ 10.50 ½ )
Chi Wheat – 5 cents/bu (Dec @ 6.03 ¾ )
Cdn $ -0.00125 (75.100 cents)
WTI Crude Oil -1.02/barrel (36.36)
Grains were weaker today, largely due to economic concerns stemming from COVID-19, and the global shutdowns currently occurring or being contemplated as countries grapple with soaring infection rates from the second wave of the virus. Corn and soybean futures actually traded into positive territory during today’s session, but then fell back to close lower, in what was a surprising drop to some. There was some very fundamentally positive news for grains today. As well, in the USA, stock futures turned positive after the government released GDP (Gross Domestic Product) data that showed that the USA economy grew by an astounding (record) 33.1% on an annualized basis in the 3rd quarter of 2020. Those gains eclipsed the contraction of 31.4% seen in the second quarter, although the American economy is said to be 3.4% smaller than it was at the end of last year. Dow futures reversed early losses of almost 250 points and are currently trading up 226 points @ 26,635.
Corn values got a good boost this morning from the USDA Weekly Sales Report and from the USDA Daily Flash Sales Announcements. In the Weekly Export Sales Report (as of close of business Thursday, October 22nd), the government reported that 2.2437 million tonnes of corn was sold last week. That volume was 50% bigger than the highest trade guess, and a whopping 4 times higher than the volume of corn sold on this week last year. China only accounted for 1.6 million tonnes of corn purchases last week. Soybean sales were in the upper end of trade expectations with 66% of last week’s business being sold to China. Actual export sales data is listed below (in thousands of tonnes):
In Flash Daily Sales Reporting, the USDA confirmed the following export sales of corn in the past 24 hours:
- 891,540 tonnes to Mexico (2020/21 marketing year)
- 541,010 tonnes to Mexico (2021/22 marketing year)
- 140,000 tonnes to Unknown (2020/21 marketing year)
All totalled, these sales amount to 1.57255 million tonnes or 61.9 million bushels. That is a LOT of corn to be sold in one day!! Mexico took full advantage of yesterday’s 14 ½ cent/bu price drop to secure big volumes of corn. Unfortunately, there were no announcements of corresponding export sales of soybeans or wheat today.
The International Grains Council today cut their worldwide corn production estimate by 4 million tonnes. Noted cuts included the Ukraine down by 2 million tonnes and the EU corn output down by 5 million tonnes. ICG did raise overall wheat production by 1 million tonnes to 764 million overall.
Brazil and Argentina have received very good rains over the past week, allowing for renewed optimism over their production prospects. Both countries will continue to need much more rain going forward, but for the short term, there is adequate moisture to encourage planting and initial crop development. Midday forecasts show more good moisture totals for central and northern Brazil, but southern Brazilian weather maps are drier, and Argentina is void of moisture in the short term.
On the day Thursday, funds were thought to have again been sellers across the board, liquidating an estimated 10,000 corn contracts (long 185,000), 5,000 soybean contracts (long 210,000), and 4,000 Chicago wheat contracts (long 29,000).