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Grains Futures Prices

Sun, Oct 13th, 2019
[[ timeframe ]] futures price quotes as of Sun, Oct 13th, 2019.
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Futures Market News and Commentary

Wheat Goes into the Weekend on a High Note

Wheat futures made gains at Friday’s close, with nearby contracts up double digits. Dec HRW leading the way seeing 16 1/4 cent gains. French milling wheat hit their highest price on the nearby chart since July this week. The USDA cut 10 cents from the projected US cash average prices for 19/20 to $4.70. If realized, that would be a three-year low. USDA left estimated Russia production at 72.5 MMT, with several other Russian firms in the 74-75 MMT range. This afternoon the CFTC reported that managed money held net short positions in wheat futures. Chicago saw a net short of 19,138 contracts as of Tuesday. Managed money was net short KC wheat futures by 35,076 contracts. MLPS wheat was at a net short position in managed money by 11,777 contracts as of Tuesday. DEC 19 CBOT Wheat is at $5.08, up 15 cents, DEC 19 KCBT Wheat is at $4.19 1/2, up 16 1/4 cents, DEC 19 MGEX Wheat is at $5.48, up 12 3/4 cents --provided by Brugler Marketing & Management
Corn Erase Thursdays Losses Heading into the Weekend

Corn futures head into the weekend riding on double digit gains, with Dec up 17 1/2 cents. Traders have shifted focus away from USDA’s monthly update on Thursday and moving onto weather across the Plains. Overnight lows were below freezing across parts of the western Plains from ND to the Texas Panhandle. On Thursday, USDA raised 19/20 feed and residual use by 125 mbu. However, they cut exports 150 mbu and FSI by 85 mbu, more than offsetting the feed use. The cash average farm price was raised 20 cents to $3.80. CFTC reported a net short in Corn futures and options of 90,668 contracts by managed money as of Tuesday. The net short was 35,506 contracts less than last week’s short, and has been the third consecutive week for managed money reducing their net short corn positions. DEC 19 Corn is at $3.97 3/4, up 17 1/2 cents, MAR 19 Corn is at $4.07 3/4, up 16 1/4 cents, MAY 20 Corn is at $4.12 3/4, up 15 1/4 cents JUL 20 Corn is at $4.16 1/2, up 14 1/4 cents -- provided by Brugler Marketing & Management
Soybeans Bounce on Trade News and Weather

Soybeans futures saw 9 1/2 to 13 cent gains in the nearby contracts on Friday. They were at their highest price since June 22, 2018 on nearby continuation chart. Soybean meal was also up, seeing a $2.80/ton gain, and soy oil was 13 points higher ahead of the weekend. Cold and snowy weather across much of the Northern Plains helped to support the market. As much as 11 inches of snow accumulation fell in ND, with snow totals from 3 to 10 inches in most of the Central/Easterns Dakotas. Friday marks the end of the 2-day US/China trade talks, with a Phase One agreement in principle. The agreement is limited to Ag products, intellectual property rights and delaying tariff rate hikes that were supposed to go into effect later this month. Under the agreement China would buy $40-50 billion of US ag goods annually by the second year. CFTC data showed spec traders flipping their net position by 15,231 contracts to a net long 6,501 contracts. NOV 19 Soybeans are at $9.36, up 12 1/2 cents, JAN 19 Soybeans are at $9.50 1/2, up 13 cents, MAR 20 Soybeans are at $9.61, up 11 1/2 cents, MAY 20 Soybeans are at $9.68 1/2, up 9 1/2 cents, OCT 19 Soybean Meal is at $306.90, up $2.80, OCT 19 Soybean Oil is at $29.83, up $0.13 -- provided by Brugler Marketing & Management
HRW Wheat Basis: Divergence

A funny thing happened on the way to the usual bearish outlook toward all things wheat: the cmdty National Hard Red Winter (HRW) Wheat National Basis Index (HRBI) continues to run stronger than what has been seen over the previous five marketing years. This past Friday saw the HRBI calculated at about 34 3/4 cents under (December Kansas City futures) as compared to the strongest for the same week over the previous 5 marketing years at 47 1/4 cents under. This despite a solid 15 1/2-cent gain by the Dec KC futures contract at Friday’s close. So, what’s going on with the cash HRW market? The KC forward curve is neutral at this time, with the Dec-to-March futures spread showing a carry of 12 1/2 cents and covering roughly 44% of calculated full commercial carry. However, this spread is showing a secondary (intermediate term) uptrend on its weekly close-only chart, indicating commercial traders could continue to buy. The question is, why? I normally don’t worry about all the reasons “why” that everyone else wants to make guesses about. But what jumps out at me with the HRW situation is the divergence we are starting to see between basis and what USDA is saying. In its latest Supply and Demand report USDA upped U.S. HRW total supplies from 1.248 bb in 2018-2019 to 1.354 bb for 2019-2020, a move that seems to be in direct disagreement with the HWBI. Stronger basis seems to be saying the bushels are hard to come by, and given wheat producers tendency to not hold tight to cash bushels the implication is that extra supply may not be there at all. Darin Newsom President Darin Newsom Analysis Inc.
Soybean Basis: A Neutral Reading

We continue to see announcements of export sales of U.S. soybeans to China, activity that many want to make into a bullish argument for the U.S. soybean market as a whole. As I talked about last time, we have seen basis in parts of the Western Corn Belt, most notably the Dakotas and far west Nebraska, strengthen a bit over recent weeks. But the big picture remains neutral at best. Wednesday evening (October 9) saw the cmdty National Soybean Basis Index (NSBI, weighted national average) calculated at 74 3/4 cents under (November futures) keeping it near its 5-year average for the second week of October calculated at 73 1/2 cents under. Yes, this is still impressive given the recent quarterly stocks number of 913 mb, a figure that will be used in subsequent monthly Supply and Demand reports as the beginning stocks number for 2019-2020. We’ve also seen the pace of export shipments increase over recent weeks (months), with the latest weekly update showing 2019-2020 exports have caught up with what was seen last year at this time. If we take all these factors together, we can see why the NSBI is neutral at this time. Strengthening demand is offsetting large stocks, at least for now. The forward curve in the soybean market would suggest this may not last, though the wild cards of weather in Brazil and trade talks between the U.S. and Washington remain in play. Basis, and cash soybeans, will continue to be a fluid situation that needs to be watched closely. Darin Newsom President Darin Newsom Analysis Inc.
Corn Basis: The Myth of Harvest

In its latest Crop Progress report, a set of numbers I’ve not hesitated to make fun of over the years, NASS pegged U.S. corn harvest progress at 15% completed through Sunday, October 6. Reportedly, the 5-year average for that timeframe is 27% complete with last year showing 33% harvested. Regarding the latter though, with USDA’s latest 500 mb revision to stocks on hand, many of those likely in 2018 production, last year’s number at this time was logically much higher than 33%. Anyway, national average basis is acting as if the 2019 harvest doesn’t exist, or at best, just a rumor at this time. Last Friday saw the cmdty National Corn Basis Index calculated at roughly 21 cents under, about 10 cents stronger than the previous high mark posted that same week over the last 5 marketing years and 24 cents above last year at this time. This goes along with what a customer from South Dakota was telling me recently, that corn basis in his area is running 30 cents better than last year. A couple things to keep an eye on this week in relation to cash corn: First, there is a winter storm forecast to move across the U.S. Northern Plains and Midwest. This could cause more damage to a crop that has already faced Mother Nature’s unending wrath. Second, the carry in corn future’s forward curve is being whittled away quickly, a move that is expected to be followed by continued strengthening of basis. Darin Newsom President Darin Newsom Analysis Inc.
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