Wheat
Wheat was under pressure with all three of the exchanges trading lower for the week. By the time the week ended, Chicago December was at new lows and Minneapolis and Kansas City were sitting just cents above their old lows.
The wheat market started the week lower with most of the early selling tied to technical selling pressure. The wheat market has been the strongest-performing grain market for the past few weeks, but Nov. 17's activity showed that all we were seeing was technical buying as traders tried to clean up the market. The day's selling was tied to concerns about the world economy as all of the major countries now are experiencing some sort of economic setback. Also, the realization that this year's wheat crop was one of the largest ever on a world basis is starting to sink in. Demand for U.S. wheat also has not been very good, and that has added to the market's weakness.
The wheat continues to struggle with most of the selling pressure tied to concerns over the weak financial markets as well as from s stronger U.S. dollar. The strength in the U.S. dollar has been the biggest bearish item for wheat as it makes U.S. wheat more expensive when compared with other countries. And this has been evident in the fact that export sales and shipments have been declining this year. Light selling also was a result of an overall weaker outlook to all of the grains. Trading has been thin and directionless over the past few weeks as the market seems more than content to stay in its trading range. Last week, it had appeared wheat was preparing to break out on its own, but instead, all it really was doing was testing its trading range. Wheat is not sitting at or near its lows, and hopefully, these levels will hold.
The wheat markets started the Nov. 20 session lower and extended session losses early. By midsession, the Minneapolis exchange was able to recover most of its losses and end with only minor losses. The Chicago and Minneapolis markets actually traded to new lows, but once they traded through the old lows, technical buying stepped in to help those contracts rally back above the lows. Most of the selling continues to come from outside sources, a sharply lower crude oil market, a lower Dow Jones, a stronger U.S. dollar and from the poor export sales pace. It seems like a broken record, but so far, the wheat market has not been trading its own merits, it has been relying on news from the other markets to help push it higher. And so far, with the economy in the shape that it is in, we are destined to see more of the same, at least until there gets to be some stability in some market.
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Corn
To begin the week, corn closed higher with small gains. These gains most likely were brought on by some harvest concerns. USDA put out its crop progress report, which showed some supportive numbers. We are only seeing 78 one of it most volatile trading days in recent weeks of the crop harvested so far this year compared with the five-year average of 94 one of it most volatile trading days in recent weeks. Corn did show support against a weak crude oil market. Corn has been trying to keep its distance from the outside markets that have been pushing the market down. However, we will need to continue to keep an eye on the three markets that seem to be driving commodities. The stock market, crude oil and the US dollar are the big drivers of commodities. The weather should improve, giving farmers a chance to get back to harvest. As we get more corn harvested, we could see these prices continue to fall.
Corn finished the day Nov. 18 slightly higher. There seems to be enough fundamental uncertainty in the market to keep traders from letting the prices reach the low of the previous week, but also from letting prices start to creep higher. The corn prices trailed off lightly but, for the most part, stayed strong.
By the middle of the week, corn closed slightly down with not much movement in the market. Corn had a very small trading range of less then 10 cents. Corn has been slow all week and has kept small price changes. Crude oil had a weaker day and the U.S. dollar did as well. Corn just had no direction on which way it wanted to move. This slow week could be favorable because of the limited downside pressure.
Corn closed lower Nov. 20 with early losses in the corn market was attributed to the sharp losses in the crude oil market, along with outside market influences being fairly negative on prices. Weakness in equities is continuing to hurt corn because of the evidence that corn is suffering demand destruction from the economic slowdown.
We'd seen corn prices decline by 38 cents by midday Nov. 21. We have had some good weather, which has been able to firm up the ground and continue harvest. Also, we have seen crude oil trading at less than $50 a barrel. This is big in diminishing the demand for ethanol. Corn doesn't have a strong underlying demand that could help prices. Corn could continue to drop because of the harvest progress and the yield that is proving to be rather good this year despite the weather conditions during the growing season.
Soybeans
To kick off the week, soybeans finished the trading day by closing moderately higher. The gains in the market was brought on by the weaker dollar and the some support in demand. This gain was moderate however. We still are not trading on fundamental supply and demand. We still have crude oil, the U.S. dollar, and the stock market moving commodity prices. Soybean harvest is almost complete with only 5 percent left to harvest. We should be able to get most of these soybeans off the field. We should have some good weather that will help dry and harden the ground.
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Soybeans finished the Nov. 18 trading day on the lower side. There was little influence from outside markets since they also generally were trading in a sideways trade. As of Nov. 17, soybean harvest in North Dakota is 94 percent complete, and in Minnesota, the soybean harvest is 99 percent complete. These numbers show that there still is some harvesting left, but not much. As we have seen soybeans drop in price, there still is some favorable demand out there. This could be slowing the price decline down or we could see them increase later. A favorable weather forecast in the near future should help to wrap up the soybean harvest for many farmers.
By midweek, soybean closed down with slight loses despite that the U.S. dollar was weaker and the underlying support for demand. Any upside potential was limited by the weak crude oil market. There was not solid direction for soybeans to go. This underlying demand hasn't push prices higher, but it has kept them from plummeting. However, there are some things that could be seen a friendly to price. We have a low ending world stock of soybeans and there is a demand out there. This could shape up to be supportive later in the year.
The November soybean contract finished 41 cents lower Nov. 20 after one of it most volatile trading days in recent weeks. The losses were seen right away in the trading day as crude oil saw steep loses. Soybeans have been continuously affected by crude oil that continues to drop lower. Many areas have very few soybean acres still remaining, and with a lack of sunlight many acres of soybeans that still are being harvested are very high in moisture content and are being found to have lower yields.
By the end of the week, we'd seen soybeans lose 38 cents before the Nov. 21 close. As the weekend begins, we have some great weather for drying out some of those wet soybeans still standing. We also have seen some more soybean ground firm up with the cooler temperatures. This has made it easy to get those last few fields of soybeans into the bin. This year's harvest will continue to be a race to the ending line.
Barley
USDA estimated no barley shipments for last week. This brings the year-to-date export shipments pace for barley to 8.4 million bushels compared with 18.1 million bushels for last year at this time. Barley export sales for last week also were estimated at zero. This brings the year-to-date export sales pace for barley to 10.2 million bushels compared with 40 million bushels for last year at this time.
Durum
Durum shipments were estimated to be 58,000 bushels last week. USDA put last week's durum export sales pace at 100,000 bushels. This brings durum's export sales pace to 11.6 million bushels compared with 34.8 million for last year at this time.
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Canola
The Winnipeg, Manitoba, canola futures market closed lower for the week and with most of the contracts dropping around $5 (Canadian). Nov. 17's session had canola higher, but from there, the main order was selling. The canola market traded slightly higher in Nov. 18's overnight session and even started the day session with modest gains, with most of the early support coming from a better opening to the U.S. soybean complex and from a firmer trading tone in all vegetable oil products. But the strength as shortlived once the U.S. soybean complex came under pressure. Farmer selling also has started to pick up, and with a weak export market, the supplies of canola in the hands of the commercials is growing, thus cutting the need to be aggressive buyers. Losses in the canola market were limited by the lack of farmer selling and from a weaker performance in the Canadian dollar.
Sunflowers
As of Nov. 16, 77 percent of the nation's sunflower crop was harvested. This compares with 70 percent for last week and 92 percent for the five-year average.
