April 10: Soybean Prices Rise after April WASDE Report

It was a cool day in Chicago, but grain traders reacted positively to the April WASDE report.

By the end of the day, no commodity finished plus or minus 1%. Chicago wheat and soybean prices were in the green, while Chicago corn prices and hard red wheat in Kansas City saw small dips.

The chart below provides a glimpse into today’s key numbers from the April WASDE report.

Let’s break down the April WASDE report and more in our daily recap at the Chicago Board of Trade.

Wheat Prices Mixed Around United States

Wheat prices were mixed thanks to an uptick in U.S. ending stocks by the USDA. The agency projected a gain of 30 million acres to 1.064 billion bushels. The uptick in U.S. stocks is the result of a downturn in feed demand across the country.

The chart below notes that U.S. stocks are below last year’s final number, but still well above the five-year average.

On the global side, the USDA said that ending stocks will come in at 271.22 MMT. That figure was a 2.33 MMT increase from the March report.

Chicago SRW prices for May added 1.25 cents to close the day at $4.92 per bushel. The July contract added 2.5 cents to close at $5.085.

May HRW contracts in Kansas City dipped 1 cent to slide under $5.22. The July contracts dipped 1.25 cents to end the day at $5.405.

Finally, up in Minneapolis, May spring wheat prices were unchanged. The July contract shed 0.25 cents to close the day just above $6.36 per bushel.

Markets are still digesting yesterday’s USDA crop progress report. Yesterday’s report showed that just 30% of the winter wheat crop is rated good-to-excellent. That figure was down from 32% from last week’s report.

The chart below provides a breakdown of crop quality for last week, the same period in 2017, and the five-year average for the top wheat producing states.

Meanwhile, the USDA noted delays in the planting of the spring wheat crop.

According to the agency, just 2% of the spring wheat crop was planted. That trailed the five-year average of 6%.

Soybean Prices Find Gains after WASDE Report

A busy day of data helped push soybean prices higher in Chicago.

May soybean prices added 3 cents to close the day at $10.50 per bushel. The July contract added 2.65 cents to close the day above $10.60 per bushel.

First, the USDA reported private export sales of 279,000 MT of old crop soybeans to unknown destinations. In addition, new crop sales of 120,000 MT to Argentina and 132,000 MT to China also came across the USDA’s system.

Of course, the big focus today was on the April WASDE report. First, we eyed ending stocks. U.S. carryout was cut by 5 million bushels to 550 million. That surprised the markets as the average analyst projection called for an increase to 570 million.

Despite the cut, U.S. soybean ending stocks are well above the five-year average and the carryout from 2016/17. The chart below provides an image of how much larger U.S. ending stocks are compared to previous years.

Meanwhile, global ending stocks were cut by 3.6 MMT to 90.8 MMT. As noted in our recap of the April WASDE report, the world is less awash in soybeans than it was in recent months.

Meanwhile, we cut right to production numbers down in South America. The USDA projected that Brazil’s soybean output will come in at 115 MMT. That figure was in line with the 114.96 MMT estimate released today by CONAB.

Down in Argentina, the USDA cut its production estimate by another 7 MMT to 40 MMT. It was the second straight month that the agency had cut is forecast by 7 MMT.

The chart below provides a breakdown of production in major South American nations.


Corn Prices Can’t Find Gains

Chicago corn prices dipped 1.5 cents to close the day a tick above $3.89. The July contract shed 1.25 cents to end the day just below $3.98 per bushel. The downturn came despite the fact that U.S. ending stocks came in lower than expectations. The agency also cut ending stocks by 1.3 MMT to 197.78 MMT.

As the chart notes below, the recent ending stocks figure is well above the five-year average.

The big news came with the USDA’s changes in production expectations for Argentina and Brazil. The USDA slashed its production figure to 92 MMT. Meanwhile, the agency cut its Argentina number from 36 MMT to 33 MMT.

While markets were digesting news from the April WASDE report, we did see a few new figures on corn production down in Brazil. Today, CONAB hiked its summer and safrinha corn production estimates for 2017/18 crop in Brazil.

The agency projects a supply of 88.62 MMT. That figure was a 1.5% jump from the March estimate. Still, it was about a 10% drop from the previous year. The reduction in the crop is tied directly to the downturn in summer acreage.

Finally, we are still digesting the Crop Progress report from Monday afternoon. For the week ending April 8, U.S. corn was 2%planted. That is in line with the average pace.

The chart below provides an update on corn planting progress.

   

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About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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