August 28 – Wheat Prices Reverse Ahead of USDA Progress Report

On Monday, markets digested the final numbers from the Farm Journal Crop Tour and prepared for the weekly release of the USDA quality and progress report. With the 2016/17 marketing calendar coming to a close on Thursday, markets are done with old crop and pushing forward on the new crop schedule.

Hurricane Harvey generated most of the headlines Monday. Flooding has ravaged portions of Houston, and it’s expected that it could be months until the region sees some relief. Roughly 15% of the U.S. refinery network has been affected by the storm. The impact of the storm pushed gasoline futures to their highest levels in nearly two years. Also, markets anticipate some delays from grain terminals along the Gulf Coast while companies continue to assess the damage to the area.

Here’s our daily recap from the Chicago Board of Trade.

Corn Prices Slide; Grain Quality Holds

The September corn futures contract dropped 2.75 cents today to close at $$3.36. The December contract dropped 2.5 cents to close at $3.51.

Traders anticipated higher quality conditions in Monday’s report. However, the figures came in the same as last week. The percent of corn rated good-to-excellent came in at 62%.

On the export front, the USDA announced the sale of more than 160,000 metric tonnes of corn for the 2017/2018 calendar.

On Friday, the CFTC reported that managed money had flipped the net position by about 57,000 contracts. As of Friday, there is a total net-short position of a little more than 17,000 contracts.

Soybean Prices Dip

The September soybean futures contract dropped 3.75 cents to close a tick above $9.35.

The November contract dropped 3.25 cents to close at $9.41.

Markets were reacting to Friday’s Pro Farmer projection of soybean production for the summer. As we noted last week, there was little information to refute the USDA’s lofty projection from the WASDE report.

Pro Farmer stated that total production would come in a little above 4.33 billion bushels. The comes out to around 48.5 bushels per acre.

Expectations for Monday’s report called for an uptick in quality rated good-to-excellent. The data came in with a 1% increase compared to last week’s report. 61% of the soybeans were rated good-to-excellent for the week ending August, up from 60%.

On the global front, BRUG reported that analysts project the Brazilian soy crop to increase by about 2.3% from last year. So, when we say that the world is awash in soy, we mean it.

Total acreage is slated to come in Brazil at around 85.7 million acres.

Wheat Prices Slump

In Chicago, the SRW wheat contract slumped 9.5 cents to close a tick above $4.06.

The December contract shed 7.25 cents to close at $4.28.

In Kansas City, the Hard Red Wheat contract dropped 7.75 cents to close below $3.97. The December HRW contract shed 6.75 cents to close at $4.255.

In Minneapolis, the September spring wheat contract shed 5.75 cents to close under $6.45. The December contract shed 5 cents to close above $6.64. According to the USDA progress report, 76% of the spring wheat has been harvested. That figure came in at 66% at the same time last year.

Wheat export inspections were on the rise from last week to the tune of a 13.25% increase.

Total export inspections came in at a little more than 670,700 metric tonnes. Not only did that figure surpass last week’s number, but it also surpassed last year’s figure by 16.2%.

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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