Grains ended the day mixed on Friday:
Corn + 1 ¾ cents/bu (Dec @ 3.65 ¼ )
Soybeans + 2 ½ cents/bu (Nov @ 10.02 ½ )
Chi Wheat – 5 ½ cents/bu (Dec @ 5.44 ¼ )
Cdn $ -0.00245 (74.665 cents)
WTI Crude Oil -0.06/barrel (40.25)
Friday was a very quiet day for news in grain trading circles. In the absence of any major announcements, grain futures traded both side of unchanged, with corn and beans settling marginally higher, while wheat futures closed lower, near their lows for the day due to technical selling.
For the second day in a row, there were no USDA Flash Sales to China reported today, although the government did report a sale of 100,000 tonnes of soymeal to an unknown destination – China is not considered likely as the buyer of this meal, since the Chinese does not often buy USA meal. The lack of Chinese buying news did allow November soybean futures to trade to their lowest level this week @ 9.95 ¼ per bushel before they rallied (up to 10.08 per bushel at one point).
Some of the recent weakness in soybean values is being attributed to speculation that the USA might be getting close to being sold out in terms of vessel loading capacity in the Oct/Nov/Dec timeframe. Unfortunately, once one turns the calendar to 2021, South American soybean supplies are far less expensive that American beans…….today, that spread was $26/tonne (71 cents/bu) on a delivered basis to China. Of course, no one really knows how much more Chinese buying could come forward from the Phase One Trade Agreement. There is no denying that soybean futures at one point traded more than 50 cents per bushel lower than they did last Friday. Lots of uncertainty as to where markets are headed, especially with USA harvest ramping up.
We did see some decent selling volumes into the close, as USA commercials pre-hedged anticipated weekend selling from farmers. As harvest progresses in the USA Midwest, there is no clear trend being report as to whether the corn and bean yields are bigger or smaller than current USDA forecasts. Next week will see all of the private forecasters release their production estimates ahead of the USDA October Crop Report (October 9th release). Next week, the USDA will release it’s September Quarterly Stocks Report. The numbers contained in that report will make up the actual 2019/20 USDA ending stocks for corn and soybeans, so from a market perspective, it is a HUGE report.
After the close of trading, the CFTC released their weekly report on fund positions in commodities, as of Tuesday, September 22nd. Today’s report showed that funds were longer corn than expected by 22,000 contracts, were not as long soybeans as expected by 6,000 contracts, and were not as long Chicago wheat as expected by 14,000 contracts. On the day today, funds were credited with buying 2,000 corn contracts (now long 68,000), buying 1,000 soybean contracts (now long 194,000), while selling 6,000 Chicago wheat contracts (long 2,000 overall).