Friday's wheat market remains higher, corn dips

INDIANOLA, Iowa-- Investors are buying the CME Group's wheat futures market Friday.

At the close, the May corn futures finished 2¾¢ lower at $3.30¾. July corn futures finished 1¾¢ lower at $3.36¾.

May soybean futures settled 4½¢ lower at $8.54½. July soybean futures ended 4½¢ lower at $8.59½.

May wheat futures closed 7½¢ higher at $5.49½.

May soymeal futures closed $5.90 per short ton lower at $303.20. May soy oil futures finished 0.19¢ higher at 26.42¢ per pound.

In the outside markets, the NYMEX crude oil market is $2.97 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 449 points lower.

On Friday, private exporters reported to the USDA export sales of 567,000 metric tons of corn for delivery to China. Of the total, 63,000 metric tons is for delivery during the 2019/2020 marketing year and 504,000 metric tons is for delivery during the 2020/2021 marketing year.

The marketing year for corn began September 1.

Al Kluis, Kluis Advisors, says traders are poised to sell rallies.

"Energy prices rallied and that pulled grain prices higher. However, by the end of the day, prices slipped again as traders continued to take their money to the sidelines. Talks of Russia and Saudi Arabia cutting oil production gave the markets a boost, but so far those are just rumors. Rallies will be tough to hold in this environment. Traders will be there to sell any strength," Kluis told customers in a daily note.

Kluis added, "More and more ports are shut down in South America due to coronavirus. Will this lead to more demand for corn and soybeans from the U.S.?"

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Thursday's Grain Market Review

On Thursday, the CME Group's farm markets end lower.

At the close, May corn futures settled 1¼¢ lower at $3.33¾; July corn futures ended ¼¢ lower at $3.38¼.

May soybean futures closed 4¢ lower at $8.58¾; July soybean futures finished 3¼¢ lower at $8.64.

May wheat futures ended 8½¢ lower at $5.41¼.

May soy meal futures closed $5.80 per short ton lower at $309.10. May soy oil futures are 0.19¢ higher at 26.24¢ per pound.

In the outside markets, the NYMEX crude oil market is $5.05 per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 99 points higher.

On Thursday, the U.S. Labor Department released its weekly Jobless Claims Report that showed Americans are losing their jobs at a breakneck speed.

For the week ending March 28, U.S. jobless claims totaled 6.64 million, double the prior week's record amount of 3.3 million.

Jack Scoville, PRICE Futures Group, says the grains are following the crude oil higher.

"The news that President Trump had spoken to the Saudis and the Russians and that they had agreed to cut back on crude production is the driving force here today. It appears to be rallying everything else. Stocks are up as well on the news. So is sugar. Wheat is lower, as Russia decided to release more wheat from reserves rather than impose some sort of an embargo on further sales. But, corn acts fine and should hopefully get some stability with the news. Corn is helping to support the beans a bit, as well," Scoville says.

Separately, the USDA's weekly Export Sales Report Thursday shows strong corn demand figures.

• Corn: 1.27 million metric tons (mmt) vs. the trade's expectations of between 800,000-1.2 mmt
• Soybeans: 1.07 mmt vs. the trade's expectations of 375,000-1 mmt
• Wheat: 258,800 mt vs. the trade's expectations of between 350,000-850,000 mt
• Soybean meal: 141,100 mt vs. the trade's expectations of 150,000-350,000 mt

Al Kluis, Kluis Advisors, says it is all about COVID-19 right now.

"We have very little – if any – friendly news to trade on, and the longer the COVID-19 pandemic lasts, the longer the recovery will last. Investors are nervous to put their money anywhere until we start seeing new COVID-19 cases peak out," Kluis told customers in a daily note.

Kluis added, "The corn market is going to struggle until Saudi Arabia and Russia stop the price war on crude oil – or we start seeing strong ethanol exports."

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Wednesday's Grain Market Review

On Wednesday, the CME Group's farm markets weaken along with outside markets.

At the close, May corn futures finished 6¢ lower at $3.34¾; July corn futures ended 7¼¢ lower at $3.38¼.

May soybean futures closed 23¼¢ lower at $8.62¾; July soybean futures closed 22¢ lower at $8.67¼.

May wheat futures finished 18½¢ lower at $5.50¼.

May soy meal futures closed $6.60 per short ton lower at $314.90. May soy oil futures closed 0.96¢ lower at 26.05¢ per pound.

In the outside markets, the NYMEX crude oil market is 46¢ per barrel higher, the U.S. dollar is higher, and the Dow Jones Industrials are 873 points lower.

Britt O'Connell, cash adviser for Commodity Risk Management Group, says it is impressive the way new-crop corn futures have held up despite the surprising 97 million acres that the USDA estimates the U.S. farmers to plant for 2020.

"We are having a rather violent yet quiet game of tug-of-war between corn and soybeans. Corn having a hard time moving lower, and soybeans having a hard time moving higher, despite each's desire and pull in that direction," O'Connell says.

With soybean acreage estimates coming in shy of the trade guess at 83.5 million, both corn and soybean markets are also seeing some support for the quarterly Grain Stocks Report, she says.

"Both of these estimates were on the lower end of the spectrum. The corn number is of particular interest. We've felt for a while that we could see revisions higher on the corn balance sheet from feed demand. This is twofold. Cattle placements into the feedlot were very high this winter, indicating that demand should be strong. The other piece of this is while the USDA will likely not change 2019 acres or yield, it would show changes in demand. Feed is a natural place for this to happen," O'Connell says.

Al Kluis, Kluis Advisors, says it is always worth noting when a bearish report does not push prices lower. That is what happened yesterday in corn.

"Corn traders are patiently waiting to see the weekly Energy Inventory Reports that are released every Wednesday morning. Anything relating to RBOB gasoline demand will be closely monitored for the coming months," Kluis told customers in a daily note.

Kluis added, "The USDA report on Tuesday had a few surprises: more corn, less soybeans. Prospective plantings for corn was reported at 97 million acres (trade prediction was 94.3), while soybean acres were reported at 83.5 million acres (trade prediction was 84.8). Corn and soybean acres combined at 180.5 million acres is a record. It was surprising to see corn end the session down 1¢ to 2¢, while soybeans were up 2¢ to 3¢ at the close. The USDA numbers should have produced a bigger reaction in the grains."

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Tuesday's Grain Review

On Tuesday, the CME Group's markets prepare for the USDA's Prospective Planting Intentions Report.

In early trading, May corn futures are ¼¢ lower at $3.41; July corn futures are ½¢ lower at $3.47.

May soybean futures are 3¾¢ lower at $8.78¼; July soybean futures are 3¼¢ higher at $8.83¼.

May wheat futures are 1¢ lower at $5.68¾.

May soy meal futures are $1.30 per short ton lower at $324.50. May soy oil futures are 0.01¢ higher at 26.88¢ per pound.

In the outside markets, the NYMEX crude oil market is 93¢ per barrel higher at a $21.02, the U.S. dollar is higher, and the Dow Jones Industrials are 93 points lower.

On Tuesday, private exporters reported to the USDA export sales of 113,000 metric tons of corn for delivery to Japan during the 2019/2020 marketing year

The marketing year for corn began September 1.

Al Kluis, Kluis Advisors, says investors will be carefully watching the corn feed usage projection in the big USDA reports at 11 a.m. CDT.

"We want to see if the USDA projection in the December 2019 Grain Stocks Report (that first quarter feed usage had increased by 19%) is correct. The USDA may correct that error and take feed usage lower in this month's report. That may result in a corn stocks estimate that is larger than the trade is expecting," Kluis told customers in a daily note.

Kluis added, "With the ethanol shutdowns and reduction in DDG supplies, soybean meal and corn usage are larger than expected. However, these increases in demand (and reductions in stocks) will not show up until the June 30 Grain Stocks Report."

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Monday's Market Review

On Monday, the CME Group's farm markets finish mostly lower.

At the close, May corn futures finished 4¾¢ lower at $3.41¼; July corn futures settled 4¼¢ lower at $3.47.

May soybean futures closed ¾¢ higher at $8.82¼; July soybean futures settled 1¼¢ higher at $8.86¼.

May wheat futures closed 1¾¢ lower at $5.69¾.

May soy meal futures finished $2.40 per short ton higher at $325.50. May soy oil futures closed 0.02¢ higher at 26.87¢ per pound.

READ MORE: 3 Big Things Today, Monday March 30, 2020

In the outside markets, the NYMEX crude oil market is $1.99 per barrel lower at an 18-year low of $19.52, the U.S. dollar is higher, and the Dow Jones Industrials are 457 points higher.

On Monday, private exporters reported to the USDA export sales of 285,000 metric tons of soybeans for delivery to Mexico during the 2020/2021 marketing year.

The marketing year for soybeans began September 1.

Al Kluis, Kluis Advisors, says investors will be watching tomorrow's USDA March Planting Intentions Report.

"The USDA report may show larger corn and soybean inventories than the trade is expecting. This report has been a bearish surprise in four of the last five years. Gasoline futures are down 5¢, and that is putting pressure on the corn market," Kluis told customers in a daily note.

Kluis added, "Will workers at the main grain exporting terminals of Argentina and Brazil refuse to go to work? A lot of export business will need to shift back to the U.S. for corn, soybeans, and soybean meal. What will happen with crude oil futures? The chart showed an inside week last week. Taking out last week's high is a positive sign for energy and commodity prices, but taking out the low is bearish for both."