Soybean complex gives back gains Friday

DES MOINES, Iowa -- On Friday, the CME Group's farm markets continue a mostly weaker stance.

At the close, the March corn futures finished 2¢ higher at $3.66½. May corn futures settled ¼¢ higher at $3.68.

May soybean futures ended 2½¢ lower at $8.92. May soybean futures are 3¼¢ lower at $9.01½.

May wheat futures settled 2½¢ lower at $5.25.

May soymeal futures closed $2.00 per short ton higher at $305.60. May soy oil futures finished 0.51¢ lower at 28.68¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.04 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 864 points lower.

On Friday, private exporters reported to the USDA export sales of 135,000 metric tons of soybean cake and meal for delivery to the Philippines during the 2019/2020 marketing year.

The marketing year for soybean cake and meal began October 1.

Al Kluis, Kluis Advisors, says the market sell-off continues due to the coronavirus news.

"There is a new case of coronavirus in the U.S. that has no known travel history to China, nor has the patient been in contact with any of the already infected people. The market is very worried. As the coronavirus spreads to other countries, fear is setting into the market. Investors are taking their money to the sidelines," Kluis stated in a daily note to customers.

Kluis added, "When the funds get to a total net short position of 400,000+ contracts (between corn, soybeans, and wheat), then that will be a great time to look at buying some call options."

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Thursday's Grain Market Review

On Thursday, the CME Group's farm markets see soybeans turn up; corn and wheat close lower.

At the close, March corn futures settled 6¢ lower at $3.64; May corn futures ended 6¼¢ lower at $3.68¼.

March soybean futures closed 5¼¢ higher at $8.86½; May soybean futures finished 3¢ higher at $8.95.

May wheat futures closed 7¼¢ lower at $5.28.

May soy meal futures finished $5.30 per short ton higher at $303.60. May soy oil futures ended 0.26¢ lower at 29.19¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.87 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 656 points lower.

Britt O'Connell, cash adviser for Commodity Risk Management Group, says the markets are being controlled by fear, panic, and pandemonium.

"With the stock market experiencing the worst trading week since 2008, nearly all markets, regardless of class, are following suit. Fears of the economic impact that the coronavirus will have on the global economy control headlines. When cooler heads prevail, I believe we will see better pricing opportunities," O'Connell says.

Separately, the USDA's weekly Export Sales Report Thursday shows weak corn, soybean, and wheat demand figures.

• Corn: 865,800 metric tons (mt) vs. the trade's expectations of between 800,000 and 1.3 mmt
• Soybeans: 339,000 mt vs. the trade's expectations of 600,000 and 900,000 mt
• Wheat: 382,000 mt vs. the trade's expectations of between 400,000 and 600,000 mt
• Soybean meal: 158,000 mt vs. the trade's expectations of 150,000 and 350,000 mt

Al Kluis, Kluis Advisors, says the markets are still being impacted by the coronavirus news.

"U.S. grain prices continue to trade in very low volume and small trading ranges. The coronavirus still has the markets on edge. Until we get a solution (or the spreading tapers off), commodity and stock prices will be tough to rally," Kluis stated in a daily note to customers.

Kluis added, "U.S. commodity prices have held up rather well, considering the sell-off in the stock market and the uncertainty of coronavirus."

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Wednesday's Grain Market Review

On Wednesday, the CME Group's farm markets close mixed.

At the close, March corn futures closed 2¢ lower at $3.70; May corn futures finished 2¢ lower at $3.74.

March soybean futures settled 2¢ higher at $8.81; May soybean futures closed 3¾¢ higher at $8.92.

May wheat futures closed 1¼¢ lower at $5.35¼.

May soy meal futures settled $5.30 per short ton higher at $298.30. May soy oil futures closed 0.17¢ lower at 29.45¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.17 per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 111 points lower.

Jack Scoville, PRICE Futures Group, says China might be booking U.S. soybeans.

"Argentina has suspended registration of ag exports, affecting mostly beans and the main reason why beans are higher today," Scoville says. "Corn and wheat have no such news and are hanging out. Not much to talk about there."

Scoville added, "There is some speculative and commercial buying in the beans on the Argentina news. The demand side is still in flux, with the virus hanging around and spreading to everywhere it seems. Going to be a hard market to trade," Scoville says.

On Wednesday, private exporters reported to the USDA the following activity:

Optional origin sales of 123,000 metric tons of corn for delivery to South Korea during the 2019/2020 marketing year. An optional origin contract provides that the origin of the commodity may be the U.S. or one or more other exporting countries.

The marketing year for corn began September 1.

Al Kluis, Kluis Advisors, says the global picture for all commodities is being impacted by the recent headlines.

"The negative headlines from the coronavirus continued to weigh on the grains during the session on Tuesday. Although corn and soybean prices did not take out the Monday low, traders were closely watching the stock market. Selling was heavy and consistent all day long. Wheat prices did make a lower low. However, prices managed to close slightly higher on the day. It is worth noting that the livestock markets have also been hit hard in recent days," Kluis stated in a daily note to customers.

Kluis added, "Export sales to China have been few and far between in recent weeks. Although this is disappointing, we have to remember that China typically buys from South America this time of year."

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Tuesday's Grain Market Review

On Tuesday, the CME Group's farm markets stabilize, following a sharp drop Monday.

At midsession, March corn futures are unchanged at $3.72; May corn futures are ¼¢ lower at $3.76.

March soybean futures are 2¾¢ higher at $8.76½; May soybean futures are 2¼¢ higher at $8.85.

May wheat futures are ¾¢ lower at $5.34.

May soy meal futures are 50¢ per short ton higher at $292.40. May soy oil futures are 0.26¢ lower at 29.61¢ per pound.

In the outside markets, the NYMEX crude oil market is 81¢ per barrel lower, the U.S. dollar is lower, and the Dow Jones Industrials are 311 points lower.

Al Kluis, Kluis Advisors, says investors will be watching the progress of the soybean market.

"We have a lot of grain price cycles that suggest a bottom in the grain market by March 13 to 15. When the panic selling is over, I expect a base to be built before some type of weather scare starts to takes grain prices higher. This is setting up a great buying opportunity for livestock farmers and ethanol shareholders," Kluis stated in a daily note to customers.

Kluis added, "We are watching for the first day that prices close higher and above the opening. That will signal that the the grain markets have put in a short-term low."

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Monday's Grain Market Review

On Monday, the CME Group's farm markets sink double digits.

At the close, March corn futures ended 4¾¢ lower at $3.72½; May corn futures finished 4½¢ lower at $3.76½.

March soybean futures closed 16¼¢ lower at $8.74¼; May soybean futures settled 16½¢ lower at $8.82¼.

May wheat futures finished 17¾¢ lower at $5.34¼.

May soy meal futures ended $2.80 per short ton lower at $292.00. May soy oil futures ended 1.14¢ lower at 29.87¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.96 per barrel lower, the U.S. dollar is higher, and the Dow Jones Industrials are 889 points lower.

On Monday, private exporters reported to the USDA export sales of 163,290 metric tons of soybeans for delivery to Mexico during the 2019/2020 marketing year.

The marketing year for soybeans began September 1.

Britt O'Connell, cash adviser for Commodity Risk Management Group, says the markets are reacting to the news regarding the spread of coronavirus. The news has vacillated greatly from nearly contained to news over the weekend that isolated outbreaks have now been confirmed in Italy, South Korea, and Iran.

"The Dow is down nearly 800 points this morning as well as in most all foreign markets. It appears that the market believes that the coronavirus could have a long-term effect on the marketplace. With concern weighing on the financial space and no positive news to lift grains, we find corn and beans trading lower," O'Connell says.

She added, "On Friday, the USDA released its thoughts from the 2020 Outlook Forum; it was bearish for corn with a prediction for the largest corn crop in U.S. history and ending stocks that would be the highest since 1987/1988. The soybean predictions were more friendly from the sheer numbers, with ending stocks at a friendly 320 million. The price projection that they put forward, however, was not incredibly promising at $8.80 per bushel, a very modest increase from 2019/2020. A mild price projection move is blamed on very strong competition from South America."