August 16: China Optimism Thrusts Soybean Prices Higher – FarmLead

News of a developing summit between U.S. and Chinese trade officials pushed soybean prices higher Thursday. According to Reuters, China’s commerce ministry will send a trade delegation to Washington later this month.

According to the Chinese Ministry of Commerce, the Chinese delegation will meet with American trade officials led by Under Secretary of Treasury for International Affairs David Malpass. The news was a positive development for soybeans, corn, and wheat prices.

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

Soybean Prices Push Higher

Soybean prices rallied on hopes that China and the United States will make progress on reducing trade tensions by the end of August. November soybean prices added 28 cents to close the day at $8.97. The January 2019 contract added 28.25 cents to close a tick above $9.09.

This morning, the USDA reported that weekly sales of old crop soybeans came in at 133,400 MT. That figure was a week-over-week decline of 68% and fell 52% short of the four-week average.

New crop sales came in at 571,600 MT, a figure that came in lower thanks to U.S. prices in recent months. We saw more than 373,000 MT sold to unknown destinations. Don’t be surprised if they end up as soymeal or in China at some point.

For the week, the USDA reported exports at 586,600 MT. That figure was off 42% from the previous week. The chart below offers a breakdown of U.S. exports.

Soybean Prices and Weekly Exports

The top five destinations for soybeans were Iran (133,500 MT), the Netherlands (108,600 MT), Mexico (98,300 MT), China (63,300 MT), and Argentina (33,000 MT). Check out this mornings’ Breakfast Brief for more information on Argentina’s upcoming soybean crop. 

In New York, November canola prices ended the day at CAD $510.40 per ton. The January contract added CAD $6.80 to close trading at $516.80.

Wheat Prices Rise on Trade Hopes

In Chicago, December SRW wheat prices added 10.25 cents to finish at $5.62. The March 2019 contract added 10.5 cents to close at $5.7325.

December HRW contracts in Kansas City added 12.25 cents to end trading at $5.75.

In Minneapolis, December spring wheat contracts added 12.5 cents. The MGEX contract ended the day at $6.1325.

On Thursday, the USDA reported that net weekly wheat sales for the 2018/19 marketing year came in at 803,000 MT. That figure was a new marketing year high. Analysts expectations had been in a range of 200,000 MT to 500,000 MT.

Mexico purchased 247,800 MT and led all countries for the week.

The agency also reported weekly exports of 461,600 MT. That figure was 34% higher than the previous week and a marketing-year high. The figure also surpassed the four-week average by 17%.

The chart below provides a breakdown of U.S. wheat exports.

US Wheat Weekly Exports

The top five destinations for U.S. wheat were Mexico (101,300 MT), Japan (84,100 MT), the Philippines (65,900 MT), South Korea (55,200 MT), and Iraq (52,500 MT).

Corn Prices Rally on Thursday

September corn prices added 3.75 cents to end the day a tick under $3.80. The March 2019 contract added 3.75 cents to bring the closing price to $3.915 per bushel.

On Thursday, U.S. old-crop corn sales finished the week up at a net figure of 339,000 MT. That was a 39% decline from the previous week. The agency reported solid sales to both unknown destinations and Mexico. Old crop sales came in on the lower end of the expectations range of 300,000 MT to 600,000 MT.

New crop sales came in at 1.045 MMT. That figure was higher than the range of expectations that topped out at 1.0 MMT.

The USDA also reported that weekly exports came in at 1.22 MMT, a number that was off 15% from the previous week. That number was also off by 13% compared to the four-week average. The chart below offers a breakdown of U.S. corn exports.

US Corn Exports Weekly

The top five destinations for American corn were Mexico (463,100 MT), Japan (290,700 MT), Colombia (147,200 MT), Peru (109,700 MT), and Egypt (44,000 MT).

Yesterday, we reported Celeres’ changes to Brazil’s soybean production forecasts. Today, we learned that Celeres expects that Brazilian corn production will hit 104.1 MMT for 2018/19. The consultancy projected that acreage will increase by 7.4% year-over-year to 14.33 million acres.

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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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