Morning CME Globex Update:
Corn and wheat futures were higher Thursday morning and soybean futures, after falling 15 percent over the past month, are currently mixed. The meager numbers from this week's export sales report will be unlikely to motivate much upward momentum in the U.S. grain and oilseed markets.
|U.S. Dollar Index:||Higher|
The U.S. Dollar Index touched a fresh 2018 high overnight and crude oil futures are down by $1 per barrel, so the corn market may experience bearish pressure from outside markets as Thursday continues. Only 165,900 metric tons of 2017/18 corn sales were shown in the weekly export sales report, which is perhaps not unexpected given the current trade climate, but is still a gut punch to the market. Mostly the Thursday morning tone in grain futures trade is one of quiet moderation. Corn prices have bounced lightly higher and are currently trading 17 cents above the low established during Tuesday's spooked trade. Meanwhile, in the cash corn market, the DTN National Corn Index, an average of cash bids around the country, was $3.28 Wednesday, showing the national average basis level stronger at 26 cents under the July futures contract.
June 21st is the longest day of the year, and it might also feel like the longest trading session of the year for soybean producers who are waiting (... and waiting) for the market to turn around and make a corrective bounce. Losses continued Thursday morning. Total open interest in soybean futures has fallen almost 4 percent this week, suggesting a drawn-out pattern of liquidation by the previously bullish-leaning speculative investor population. The weekly export sales report showed a disappointing 301,700 metric tons of 2017/18 soybean sales. And as frustrating as this might be for the individual farmers experiencing losses, the overall U.S. soybean crop benefits more from the widespread rainfall than it loses from localized flooding, so the wet Midwestern forecast Thursday will be interpreted bearishly by the new crop futures market. The DTN National Soybean Index was $8.27 Wednesday, with old crop basis bids steady at an average of 62 cents under the July futures contract.
From the harvest that is just getting started in southern Russia and Ukraine, the barley and winter wheat yields are reportedly lower than average but not disastrously so. Meanwhile, low yields from harvested fields in Kansas continue to affect the Hard Red Winter wheat market. Rather than the typical scramble to find elevator space for all the harvested wheat, the Southern Plains region has had no problem fitting this year's crop in available farmer bins and commercial elevators. Nearby futures spreads have uncharacteristically tightened by 4 cents over the past month while merchandisers were eager to store bushels. But the fight to post the most extreme harvest-time basis bid appears to finally be over. HRW basis finally slackened Wednesday afternoon, to an average of 6 cents under then July KC futures contract. The basis bids for other wheat varieties are also strong for this time of year, but not as extreme, because other regions didn't experience the exceptional drought that plagued HRW country in 2018. The average basis bid Wednesday for SRW wheat was 22 cents under the July Chicago contract, and the average basis bid for HRS wheat was 14 cents under the July Minneapolis contract. In the second week of the 2018/19 wheat marketing year, the export sales report showed 461,600 metric tons of sales.
Elaine Kubcan be reached at email@example.com
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