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Grains Futures Prices

Sun, Oct 20th, 2019
[[ timeframe ]] futures price quotes as of Sun, Oct 20th, 2019.
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Futures Market News and Commentary

Bean Prices Higher on Friday but Lower on Week

Soybeans futures closed up 2 1/4 to 2 1/2 cents on Friday, but were lower by 2 cents on the week. Soybean meal finished Friday’s session $1.70/ton higher, but still ended the week down by $2.30/ton. Soy oil was 39 points higher by Friday’s close and ended the day with a 3 point gain. As of Tuesday, managed money added 16,502 contracts to a long position, while simultaneously the short position was reduced by 26,026. That brought soybean futures to a net long position of 49,029 contracts, the highest net long position for that group since June 5th 2018. Managed money also reduced their net short position for soy meal for the 4th consecutive week. Soy oil’s trend also continued for the fourth consecutive week, as managed money increased their net long position to 43,457 contracts, the highest fund net long for soy oil since Nov 28th 2017. USDA’s weekly export sales report showed soybean export sales were 13.5% below last week, but were at the top of trade estimates with 1.600 MMT for th... Read more
Corn Market News and Commentary

Corn futures head into the weekend 2 1/2 to 3 3/4 cents lower in the nearby months, Dec corn lost 6 3/4 cents on the week. The CFTC report this afternoon showed managed money spec funds still net short; however as of 10/15 it was only at 66,141 contracts making this now the 4th consecutive week where managed money has reduced their net short position for corn futures. Traders over estimated weekly corn export sales; the holiday delayed report from this morning indicated that for the week ending 10/10 corn saw 368,756 MT of export sales. That is up 29.6% compared to last week. Exports are still way behind last year, with the accumulated exports for MY through 10/10 at 2.637 MMT now 63.75% behind last year’s pace. DEC 19 Corn closed at $3.91, down 3 3/4 cents, MAR 19 Corn closed at $4.02 3/4, down 3 3/4 cents, MAY 20 Corn closed at $4.09 1/2, down 3 1/4 cents JUL 20 Corn closed at $4.15 1/4, down 2 1/2 cents -- provided by Brugler Marketing & Management Read more
Wheat Mixed Ahead of Weekend

Wheat futures are mixed at Friday’s midday. Winter wheat gained on the week, Chicago finished with a 24.3 cent gain and KC improved 13 cents over last week. MPLS finished Friday down by 7 1/2 cents, pushing it to 5.8 cents lower on the week. The export sales report indicated 395,122 MT of sales for the week ending 10/10; traders anticipated 250,000-500,000 MT. Chicago HRW net sales increased 8.17% over last week, and were 440.32% higher than the same week a year ago. HRW had a 41.6% share of the export sales, while Minneapolis HRS held a 36.9% share. The USDA reported 34,787 MT of SRW net export sales for the week ending 10/10, which was 8.8% of all wheat. All wheat accumulated exports are up to 9.437 MMT for the MY 26.88% ahead of last year’s pace and already 38.95% of the 2018/19 MY total. DEC 19 CBOT Wheat closed at $5.32 1/4, up 6 3/4 cents, DEC 19 KCBT Wheat closed at $4.33 3/4, up 2 1/2 cents, DEC 19 MGEX Wheat closed at $5.44 1/2, down 7 1/2 cents --provided by... Read more
Cash Winter Wheat: The Pillow Commercial

As I was searching around for something new to talk about in this analysis, I stumbled upon a chart of the cmdty National Soft Red Winter Wheat Price Index (SRPI, weighted national average) minus the cmdty National Hard Red Winter Wheat Price Index (HRPI, also weighted national average), and the first thing that came to mind was a pillow commercial. I’m sure there’s more than one of you out there scratching your head at that one. Thursday (October 17) afternoon saw the SRPI calculated at $5.09 1/2, up 12 1/4 cents for the day as it followed the nearby Chicago futures market perfectly. The HRPI was calculated at $3.97, up 6 1/4 cents and also perfectly in-step with its underlying Dec Kansas City futures contract. Now, look at the difference in price between those two, coming in at a whopping $1.12 1/2, SRPI over the HRPI. This is the strongest the SRPI has been in relation to the HRPI through at least 2014, at not just by a little. Before this current run, the previous high was a 71-cent premium from October 2016. What’s driving cash SRW higher against all other wheat classes? A couple things, starting with the reported drought raging across Australia, where exports are expected to all but disappear. Second, don’t forget about the horrific weather much of the U.S. SRW wheat growing area experienced over 2019, conditions that are expected to cut SRW ending stocks close to 100 mb, with HRW stocks pegged closer to 500 mb. Why did this remind me of a pillow commercial? Soft is preferred over hard. Darin Newsom President Darin Newsom Analysis Inc.
Decatur Beans a Poppin'

I had a message come in late Monday that I needed to take a look at soybean basis in Decatur, Illinois. Word was that despite harvest, or at least the rumor of it this year, the central Illinois market was heating up. I pulled up a chart for the cmdty County Soybean Basis Index for Macon County, Illinois (ZSBAILMA.CM), home of Decatur, and sure enough, solid strength this week. To set the stage, let’s go back a few days. On September 1, the Macon County basis index was calculated at 39 3/4 cents under (November futures). By last Friday, October 11, this has firmed to 34 3/4 cents under, an impressive move given the 16-cent rally posted by the Nov futures contract over that same time frame. However, since last Friday this same index jumped to 30 1/4 cents under, doubling the previous move over the course of two days. Furthermore, the trend on its daily chart is decidedly up meaning more basis strength lies ahead (from a technical point of view). What is this strength showing? The Decatur, Illinois area is home to some of the largest soybean processing plants in the U.S., and the supply of soybeans is obviously getting tight. What about the 900-plus mb left over from last year? They must be hard to find, and this year’s crop is still standing in the field, for the most part. Therefore, the fundamentals should confirm what charts are already showing us: The fire underneath (basis) should stay hot enough to keep Decatur soybeans popping. Darin Newsom President Darin Newsom Analysis Inc.
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.
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