Monday October 20, 2024, 5:30 AM CST
MORNING MARKET COMMENTS BY: Al Kluis
This is Kluis Commodity Advisors with your opening grain comments. On Friday, the grain markets closed higher with corn and soybeans rallying to test resistance. Corn and wheat posted a weekly higher close and we see some follow-through in the overnight trade
In the news over the weekend, China and the US trade negotiators are meeting this week in Indonesia, before the month-end meeting in South Korea. This was viewed as positive and has the US stock market and soybean market moving higher. Stocks in China are sharply higher.
At this hour, corn futures are up 1¢, soybean futures are 8¢ higher, and wheat futures are 1 to 2¢ higher.
On the Dalian Commodity Exchange in China, corn and soybean futures are higher. In the grain market in Europe, wheat futures are 2¢ per bushel lower at $7.33.
TO DO: Review our price targets and where you should be. On Friday, we made the recommendation to buy fuel through the second quarter of 2026.
WHAT WE’RE THINKING: We are in a demand-driven bull market for corn while the bull spreads continue to work. The spread between December 2025 to July 2026 corn has gone from 36 to 28¢.
WHAT TO WATCH: I am watching soybean basis levels continue to improve as more grain companies follow ADM’s lead and begin offering free DP for soybeans. That move is about three weeks too late, since most farmers have found a place to store soybeans rather than give them away on a wide basis.
THE GRAIN MARKETS
Overnight Markets
December. Corn: The trading range is 2¢, the last trade shows corn futures are up 1¢ at $4.23 ½ per bushel.
November Soybeans: The trading range is 10¢; the last trade shows prices up 8¢ at $10.29.
Wheat: Chicago wheat is up 2¢, KC wheat futures are up 2¢, Minneapolis wheat is up 1¢.
Global Stock Markets: The stock market in China is up 3.4% while stocks in Japan are up 2.4%. European stocks are up 0.5%.
Outside Markets: The US Dollar Index is up 0.11 points at 98.54, crude oil is down 20¢ per barrel at $57.34, S&P futures are up 17 points at 6,719. Dow futures are up 92 points at 46,473 and gold futures are up $56 per ounce at $4,270.
Livestock Futures: December hogs closed down 22¢ at $82.37, December cattle closed down $6.05 at $241.82 and November Feeder cattle closed down $9.25 at $371.70.
TODAY’S CHART: Corn Carrying Charge chart
About this chart: This is the chart of the spread between December 2025 corn futures and July 2026 corn futures. This is often called the carrying charge spread. This spread bottomed out at 18 cents in late February. Then the spread widened out as crop production estimates increased, with the spread getting out to 36 cents in mid-August (just as the corn futures market bottomed). The spread closed at 28¢ on Friday. The next target on my chart is the April low at 23¢. [Chart source: DTN/ProphetX]
MONDAY WEATHER:
Good morning! I’m DT, Al’s weather guy. The focus now is on South America. The US weather is good for getting harvest wrapped up. After a very warm week, temperatures will return to normal with limited rain in the eastern Corn Belt and Delta.
Now on to South America, where more rain hit in southern Brazil and Argentina. The rain in Brazil moved north into some of the dry areas. The forecasts are unchanged from Friday with more rain in the forecast for this week in central and northern Brazil. The extended models are to reverse the trend: Argentina and southern Brazil dry out, while central and northern Brazil get more rain.
Al tells me the main market factor now is fund positioning, but that if we are only trading weather, then grain prices will start out lower this week.