August 13: Wheat Prices Sink Across U.S.

The post-WASDE selloff continued in the wheat complex despite ongoing dryness and concerns about production around the globe. Soybean prices found small gains following the huge slump on Friday. Corn shed 1.25 cents in the front month and next-month contracts in Chicago on Monday. Markets will again be on the move Tuesday following the release of today’s Crop Progress and Quality Report, which we recap in the paragraphs below.

Here’s everything you need to know about grain prices at the Chicago Board of Trade.

Wheat Prices Slump Again

It was another ugly day in the wheat markets. The September SRW contract in Chicago shed 13.25 cents to end the day at $5.335 per bushel. The December contract dropped 16.7 cents to close at $5.555.

In Kansas City, the losses were much bigger. The September contract shed 19 cents to end the day just under $5.41 per bushel. The December contract dropped 18 cents to close the day at $5.67 per bushel.

The downturn continued as Friday’s August WASDE numbers didn’t quite meet traders’ expectations. The USDA cut ending stocks expectations by 2 million bushels. Analysts had expected a much deeper cut given growing concerns about crop quality and production size in Europe and Russia.

Spring wheat contracts in Minneapolis didn’t fare any better. The September contract dropped 16 cents to close just under $5.93 per bushel. The December contract dropped 15.75 cents to end the day above $6.10 per bushel.

As we noted over the weekend, Saudi Arabia has banned purchases of Canadian wheat and barley due to the ongoing political spat involving the former’s human right record. Canadian officials criticized Saudi Arabia’s arrest of political activists.

Saudi Arabia said it will also divest assets in Canada. It will be interesting to see what they get for their controlling interest in the Canadian Wheat Board, which Saudi Agricultural and Livestock Investment Company purchased in 2015 for $250 million.

It’s also likely to backfire for Saudi Arabia. Right now, North America and Argentina appear to be the only reliable sources of wheat judging on expected yields.

Finally, this afternoon, the USDA reported its weekly crop progress report.

On the winter wheat side, 94% of the harvest is now complete. That figure is 2 points below the 5-year average.

For spring wheat, the U.S. harvest is 35% complete. That figure is 8 points ahead of the 5-year average.

The agency also said that 75% of American spring wheat is rated G/E. The figure represents a 1 point increase from the previous week. During the same period in 2017, just 33% of the spring wheat crop was rated G/E.

US Spring Wheat Crop Condition

Corn Prices Retreat at CBOT

The September corn contract shed 1.25 cents to close the day at $3.565. The December contract shed 1.25 cents to end the day at $3.705. Today, the USDA reported that total corn inspections came in at 1.262 MMT for the week ending August 8.

That was 65% higher than the same period in 2017.

The USDA also reported a private sale of about 213,000 MT of corn to Mexico. The sale, however, was split between 142,000 MT of new crop and 71,000 in old crop for 2019/20 delivery.

The agency also reported crop quality in today’s afternoon report. The agency said that 70% of the U.S. corn crop is rated G/E.  That figure is a 1 point drop from the previous week, but 8 points ahead of the quality figure during the same period in 2017.

US Corn Crop Conditions

Soybean Prices Find Some Gains

Bargain buyers swooped in on soybeans after Friday’s massive downturn. The September soybean contract added 6.5 cents to end the day just above $8.57. The December contract closed just under $8.69 after gaining 7 cents.  

Today, the USDA said that Mexico purchased 142,500 MT of new crop soybeans. The agency also pegged export inspections at nearly 581,000 MT. That figure was a 35% drop week-over-week, and about 2% off from the same period in 2017.

The USDA also reported that 66% of the U.S. soybean crop is rated G/E. That figure represents a 1 point decline from the previous week. During the same period in 2017, just 59% of the soybean crop was rated G/E. The chart below provides a breakdown of soybean quality in the top producing states.

US Soybeans Crop Condition

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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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