12.10.2020 (www.agriculture.com) - On Monday, the CME Group’s soybean complex drops sharply.
At the close, the Dec. corn futures closed 6¢ lower at $3.89. March corn futures ended 5½¢ lower at $3.96½.
Nov. soybean futures settled 31¾¢ lower at $10.33¼. January soybean futures ended 29¢ lower at $10.36½.
Dec. wheat futures closed ½¢ higher at $5.94¼.
Dec. soymeal futures settled $9.40 per short ton lower at $354.30. Dec. soy oil futures closed 0.85¢ lower at 33.16¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.10 per barrel lower at $39.50. The U.S. dollar is higher, and the Dow Jones Industrials are 312 points higher.
Britt O’Connell, cash adviser for Commodity Risk Management Group, says that today’s markets are seeing follow-through selling.
“After a WASDE report on Friday that largely fell within the expected range both corn and soybeans test significant resistance at $4 and $10.80 respectively. After they failed to breach, we closed midrange Friday. Monday morning has brought follow-through selling in the face of a very productive week of harvest. With significant progress being made last week, (official update from USDA will be released Tuesday), yield reports seem to be average to better, with a few exceptions,” O’Connell says.
Northern Brazil received some much needed rain fall over the weekend, with forecasts showing more in the next 10 days.
“Brazilian farmers are about 3% planted vs normal at 19%. With record prices in Brazil their farmers will be pushing hard to plant the acres,” she says.
“The funds hold a record-long position in soybeans, while farmers are aggressively selling beans out of the field across the scale at the best prices they have seen in a number of years. With an inverse in bean futures and attractive basis levels there is no incentive for the farmer to hold soybeans. Corn continues to play follow the leader. While ending stocks have been trimmed from our initial projects we still appear to have ample corn supplies,” O’Connell says.
Al Kluis, Kluis Advisors, says that investors are today’s USDA Crop Progress report.
“The USDA Crop Progress report today will show corn harvest at about 37% and soybean harvest at 55%. Last week was one of the largest harvest weeks of the year. Many of our customers are done with soybeans and getting close to 50% done with corn. Many farmers are now focused on fall tillage and getting fertilizer put on. This sets the stage for less prevent plant (and more total crop) acres in 2021,” Kluis told customers in a daily note.
He added, “How much rain will hit (and when) in central Brazil? Last week, several cities reported record-high temperatures for October; temperatures soared to as high as 112°F. The European weather model calls for 1 to 3 inches of rain later this week with 70% coverage. Another model has limited coverage and 0.25 to 0.5 inches of rain. After six weeks of hot dry conditions, a half inch of rain will not do much good.”